Agricultural to Residential Land Conversion Fees

Agricultural to Residential Land Conversion Fees when converting agricultural land to residential land is a matter of great concern for many individuals and households seeking to legalize their land use purposes. The determination of the payable amount depends on the conditions, land origin, and the land price table issued by state agencies. Long Phan Consulting Company provides the legal basis and calculation methods to help clients gain an accurate perspective and proactively manage the procedure.

General principles regarding land use fees when changing land use purposes

Based on Resolution 254/2024/QH15 by the National Assembly on piloting specific mechanisms and policies in the land sector, the general principle for collecting land use fees upon conversion is determined to ensure a harmony of interests among the State, land users, and investors. It must comply with land use plans and plannings approved by competent authorities while ensuring openness, transparency, correct jurisdiction, and alignment with land prices under the current valuation mechanism.

Accordingly, when a land user is permitted by a competent state agency to convert the land use purpose, the financial obligation regarding land use fees must be determined based on the difference between the land price under the new purpose and the land price under the former purpose at the time of the conversion decision. The determination, collection, payment, and management of these fees must follow the correct sequence and procedures to prevent state budget revenue loss without creating an unreasonable financial burden on land users, contributing to a stable real estate market and sustainable land use.

Agricultural to residential land conversion fees from January 1, 2026

The land use fee collection rate is classified based on whether the land area falls within or exceeds the local residential land allocation quota. Pursuant to Article 10 of Resolution 254/2024/QH15 on the implementation of the Land Law, the payment ratios differ significantly to regulate land resource utilization. Individuals and households should note these quotas to accurately estimate conversion costs.

• Area within the local residential land allocation quota: Land users enjoy preferential financial obligation policies upon conversion. Specifically, the collection rate is only 30% of the difference between the residential land price and the agricultural land price at the time of the decision. This applies to agricultural parcels within the same plot as residential land or originating from garden/pond land.
• Area exceeding the quota but not more than 1 time the quota: When the converted area exceeds the allocation quota but by no more than one time that limit, the fee rate increases. The user must pay 50% of the value difference between residential and agricultural land. This is an intermediate rate for entities with land funds larger than standard local norms.
• Area exceeding more than 1 time the allocation quota: For land areas exceeding the quota by more than one time, the State recovers the maximum value difference. The user is obligated to pay 100% of the land value difference to ensure fairness in exploiting land funds. This rate accurately reflects the market value of the land use rights upon conversion to residential purposes.

>>> See more: Conversion of Garden Land to Residential Land

Basis for calculating land use fees when converting agricultural land to residential land

According to Clause 1, Article 5 of Resolution 254/2024/QH15, the basis for calculating agricultural to residential land conversion fees includes:

1. The land area allocated, permitted for conversion, or recognized for land use rights.
2. The land price according to the land price table and the land price adjustment coefficient; in the case of auctioning land use rights, the land price is the winning bid price.
3. State policies on land use fee exemption and reduction.
4. Infrastructure construction costs are determined in accordance with construction laws.
5. The ratio for calculating land use fee collection for each type of land based on the subject and form of land use.

Cases eligible for exemption or reduction of land use fees

Pursuant to Clause 1, Article 157 of the 2024 Land Law (supplemented by Clause 4, Article 71 of the 2025 Law on Science, Technology and Innovation, and amended by Point b, Clause 2, Article 104 of the 2025 Vietnam Civil Aviation Law), exemptions and reductions of land use fees and land rents are implemented in the following cases:

• Using land for production and business in investment-incentive sectors or areas, excluding commercial housing construction or commercial/service use.
• Using land to implement housing policies for revolutionary contributors, incapacitated war invalids/sick soldiers, poor people, or poor martyrs’ households.
• Using land for social housing projects, worker accommodations in industrial parks, armed forces housing, or rebuilding apartment buildings.
• Resettlement land for those relocated due to life-threatening risks, or officials working in border communes, islands, or extremely difficult socio-economic areas.
• Land used by ethnic minorities in accordance with Government regulations.
• Land used by public non-business units.
• Land used for aviation infrastructure, public transport parking/maintenance facilities, or surface works serving underground structures.
• Land used for specialized railway infrastructure and auxiliary facilities.
• Land used for Public-Private Partnership (PPP) investment projects.
• Land used by cooperatives/unions of cooperatives for headquarters, drying yards, warehouses, or services directly serving agriculture, forestry, aquaculture, and salt production.
• Land for clean water supply, drainage, and wastewater treatment facilities in urban and rural areas.
• Land (non-defense/security) used for defense/security purposes by military or police enterprises.
• Residential land allocated to relocated households/individuals who do not qualify for compensation and have no other accommodation in the commune.
• Land for laboratories, technology/enterprise incubation facilities, testing facilities, and shared infrastructure supporting scientific research and innovation.

>>> See more: Cases eligible for 50% land use levy reduction

Long Phan Consulting Company provides consulting services on agricultural to residential land conversion fees

Long Phan Consulting Company provides comprehensive consulting services related to land use purpose conversion and determining land use fee rates under current laws. We assist clients in evaluating the legal conditions of the plot, analyzing calculation bases, and forecasting financial obligations. Our expert team structures support into the following key area:

• Review legal conditions and advise on procedures for applying for land use conversion (especially from agricultural land to residential land) according to approved land use plans and schemes.
• Consulting on agricultural to residential land conversion fees.
• Consultation on determining the basis for calculating and the amount of land use fees when changing land use purposes according to the provisions of the 2024 Land Law and its implementing decrees.
• Assisting in preparing and completing applications for land use change; representing clients in submitting applications and monitoring the processing progress at the Department of Natural Resources and Environment.
• The client’s representative will declare and work with the tax authorities to determine, notify, and fulfill the obligation to pay land use fees correctly, fully, and on time.

Frequently Asked Questions about agricultural to residential land conversion fees

Long Phan Consulting Company is a compilation of frequently asked questions regarding agricultural to residential land conversion fees; please refer to them:

At what point in time is the land price table applied when calculating the fee for changing land use purpose?

Financial obligations are determined at the time the competent State agency issues a decision permitting the land use change. If the application is delayed due to an administrative error, you have the right to request that the land price at the time of submitting the valid application be applied.

(Legal basis: Article 10 of Resolution 254/2024/QH15.)

What are the criteria for determining the land allocation limit for residential purposes?

This limit is specifically stipulated by the Provincial People’s Committee for each locality (district, commune, etc.) based on land availability and residential planning. You need to consult the latest regulations on land allocation limits for residential land in the province/city where the land is located to calculate the 30%, 50%, or 100% ratio.

(Legal basis: Article 10 of Resolution 254/2024/QH15.)

How much is the fee for changing the land use purpose of garden and pond land that is not on the same plot as residential land?

In cases where garden and pond land is attached to residential land but has been subdivided before July 1, 2014, the preferential fee (30% difference within the limit) will still apply when converted to residential land. If the independent agricultural land plot does not originate from garden and pond land attached to residential land, the fee may be applied according to the general regulations on land use conversion for organizations and individuals.

(Legal basis: Clause 2, Article 10 of Resolution 254/2024/QH15.)

Is it mandatory to have access to land when converting agricultural land to residential land?

The division and consolidation of land parcels as stipulated in point d, clause 1, Article 220 of the 2024 Land Law must ensure access connecting to public roads or obtain the consent of adjacent land users to allow access to public roads. In cases where a land user allocates a portion of a residential land parcel, or a parcel containing both residential and other land, for an access road, the land use conversion for that area is not mandatory when dividing or consolidating the land parcel.

In cases where only a portion of a land parcel is being converted to a different use, land subdivision is not mandatory. The consolidation of land parcels does not require them to have the same land use purpose, the same form of land use fee or land lease payment, or the same land use term.

In cases where land use rights are divided according to a court judgment or decision, and the division does not meet the conditions, area, and dimensions for land subdivision as stipulated in Article 220 of the 2024 Land Law, land subdivision shall not be carried out, except in cases where the court judgment or decision takes effect before August 1, 2024.

In cases where complete and valid documents for land subdivision or consolidation procedures were submitted before the effective date of this Resolution but have not yet been processed, the provisions of this Resolution shall apply.

(Legal basis: Clause 3, Article 11 of Resolution 254/2024/QH15.)

Will land use fees already paid be refunded if the new regulations introduce lower fees?

This applies to cases where, between August 1, 2024, and before January 1, 2026, a household or individual has been granted permission by a competent state agency to convert land use from garden land, pond land, or agricultural land within the same plot of land containing residential land, or from land originally garden land or pond land attached to residential land, to residential land.

However, land users who have separated land for the purpose of transferring land use rights, or whose land plots were independently surveyed and divided into separate parcels by the surveying unit when drawing cadastral maps before July 1, 2014, and whose households or individuals have already paid land use fees as notified by the tax authority, may request the tax authority to recalculate the land use fees according to the provisions of this Resolution; the tax authority will recalculate the land use fees and notify the land users.

If the recalculated land use fee is lower than the amount already paid, the land user will be reimbursed by the State by deducting it from their land use fee and land lease obligations.

(Legal basis: Clause 10, Article 4 of Resolution 254/2024/QH15.)

How is the area used for calculating land lease fees determined?

The area for calculating land rent is the area of ​​land subject to land rent payment as stated in the land lease decision, the decision to adjust the land lease decision, the decision to permit the change of land use purpose, the decision to extend land use, the decision to adjust the land use term, the decision to adjust the detailed planning, and the decision to permit the change of land use form in cases where land rent must be paid according to regulations (hereinafter collectively referred to as the decision on land lease).

If the area stated in the land lease contract is larger than the area stated in the decision on land lease, the area for calculating land rent will be determined according to the area stated in the land lease contract.

The area for calculating land lease fees in cases where the right to use leased land is recognized is the area of ​​land recognized according to the Information Transfer Form for Determining Financial Obligations Regarding Land, which is transferred by the land management agency to the tax authority as stipulated in the Decree on Issuance of Certificates of Land Use Rights, or according to the signed Land Lease Contract.

The area for calculating land rent as stipulated in Clauses 1 and 2 of Article 24 of Decree 103/2024/ND-CP is calculated in square meters (m2).

Legal basis: Article 24 of Decree 103/2024/ND-CP.

Conclusion

Understanding the land use fee collection rates when converting agricultural land to residential land helps clients proactively manage finances and ensure asset legality. The regulations effective from January 1, 2026, require precision in applying land price tables and local quotas.

For technical support and optimal legal solutions, please contact Long Phan Consulting Company via Hotline 1900636389 for professional advice on agricultural to residential land conversion fees.