Compensation for investment costs when land is recovered: When? Procedure?

Compensation for investment costs when land is recovered is a legal right that land users enjoy. This process often entails many complex issues regarding investment value determination, compensation conditions, and necessary legal procedures. The article below will provide detailed information about the cases, conditions and methods of calculating compensation for remaining investment costs in land that customers need to clearly understand to protect their legitimate rights.

Cases of compensation for remaining investment costs in land when land is recovered

The state that recovers land must ensure the rights of land users. Identifying these cases helps people clearly understand their rights when land is recovered. According to the provisions of Article 107 of the Land Law 2024, cases of compensation for remaining land investment costs when the State recovers land include:

• Land is allocated by the State without collection of land use fees, except in cases where agricultural land of households and individuals is compensated for land as prescribed in Article 96 of the Land Law 2024;
• Land allocated by the State to organizations is subject to land use fees but is exempt from land use fees;
• Land is leased by the State with annual land rental payment; Leased land has a one-time rental payment for the entire rental period but is exempt from land rental, except for the case specified in Clause 2, Article 99 of the Land Law 2024;
• Land belonging to the agricultural land fund used for public purposes is leased by the Commune People’s Committee;
• Contracted land for agricultural production, forestry, aquaculture, and salt production;
• The allocated agricultural land area exceeds the limit prescribed in Article 176 of the Land Law 2024.

Land users subject to land recovery will not be compensated for the land but will be considered for compensation for remaining land investment costs if these costs are legally incurred according to the provisions of Clause 2, Article 107, Land Law 2024.

Land investment costs considered for compensation include:

• Site leveling costs;
• Reclamation costs to increase soil fertility, remove acidity and salinity, prevent erosion and erosion of agricultural land;
• Cost of reinforcing the bearing capacity against vibration and land subsidence for land used for production and business premises;
• Other related costs invested in land in accordance with the land use purpose.

In a special case, a land tenant who pays annual land rent but has paid in advance for many years but has not used up the paid land rent period will be compensated for the remaining prepaid land rent. This is done in accordance with the law on collection of land use fees and land rent.

>>> See more: How to compensate when the State recovers land from businesses?

Conditions for compensation for land investment costs when land is recovered

To receive compensation for investment costs, land users must meet the legal conditions. Defining these conditions helps make the compensation process transparent. Customers need to clearly understand these conditions to protect their rights.

According to the provisions of Clause 2, Article 17 of Decree 88/2024/ND-CP effective from August 1, 2024, the conditions for compensation for investment costs in land when land is recovered are specifically regulated. Investment costs in land will be considered for compensation when the following conditions are met:

• Have records and documents proving investment in land;
• In case there are no records or supporting documents, the Provincial People’s Committee will base on the actual situation in the locality to determine the remaining investment costs.

Documents and documents proving investment in land as prescribed in Clause 3, Article 17 of Decree 88/2024/ND-CP, including one of the following documents:

• Documents, lease contracts, land leveling and land reclamation contracts for land allocated or leased by the State.
• Contracts for land reclamation, erosion control, anti-erosion, construction, and ground reinforcement for production and business premises.
• Documents, contract liquidation; Invoices and payment documents for each expense invested in land.
• Other documents and contracts related to investment in land are established at the time of investment.

The remaining land investment costs are prescribed according to Clause 4, Article 17, Decree 88/2024/ND-CP and are determined according to the following formula:

P = ((P1 + P2 + P3 + P4)/T1) x T2, in there:

• P: Remaining investment costs in land.
• P1: Site leveling costs.
• P2: Renovation costs to increase soil fertility, remove acidity, and prevent erosion and water intrusion for land used for agricultural production purposes.
• P3: Cost of reinforcing the ability to withstand vibration and land subsidence for land used for production and business premises.
• P4: Other related costs invested in land in accordance with the land use purpose.
• T1: Land use term.
• T2: Remaining land use term.

In case the time of investment in land is after the time of land allocation or lease by the State, the land use term (T1) is calculated from the time of investment in land. This is an important new point in Decree 88/2024/ND-CP to ensure fairness for land users.

Procedures for compensation for investment costs when land is recovered

Procedures for compensation for investment costs when land is recovered are detailed in Article 87 of the Land Law 2024. This process requires coordination between land users and state agencies.

The land recovery process and compensation procedures for investment costs when land is recovered are carried out according to the following steps:

Step 1: Prepare and announce a land recovery plan

Before land recovery, the local government (commune-level People’s Committee) disseminates the project and policies related to compensation, support, and resettlement.
Notice of land recovery is sent to each person whose land is recovered and posted publicly.

Step 2: Count and determine damage

The government and the compensation unit conduct investigations, surveys, and measure the current status of land, assets, and income associated with land.
In this step, the remaining land investment costs are counted and determined for compensation, if the following conditions are met:

• Have actual investment in land (not attached assets such as houses).
• The investment has not yet recovered its value at the time of recovery.
• Must be proven by records, documents or physical verification.

At the same time, land users declare and provide documents and documents proving investment costs in land to the appraisal agency. This file includes documents, contracts, invoices, and payment documents related to investment in land.

Step 3: Prepare a compensation plan

The unit performing the compensation task shall prepare a compensation, support, and resettlement plan, including a separate section for remaining land investment costs (if any).

The plan is publicly posted and must be organized to collect people’s opinions on the compensation plan. In case land users still disagree, dialogue can be held to agree on a plan.

Step 4: Appraisal and approval

The completed plan will be officially reviewed and approved by the competent authority.

The compensation for remaining investment costs must be approved in this decision to have legal effect.

Step 5: Compensation payment and land recovery

People whose land is recovered will receive money according to the approved plan, including the remaining investment costs if eligible.

The payment will be accompanied by a land handover deadline. If you do not comply, there will be enforcement measures after steps of mobilization and persuasion.

In-depth consulting services on procedures for claiming compensation for investment costs when land is recovered at Long Phan Consulting Company

Long Phan Consulting Company provides professional consulting services on land compensation. Our experienced team will support customers in every situation. Timely support will help you protect your legitimate rights and interests in the most effective and safe way.

In-depth consulting services of Long Phan Consulting Company include:

• Consulting on determining cases and conditions for compensation for remaining investment costs in land;
• Analyze specifically the actual situation of customers to determine the possibility of compensation according to the latest regulations;
• Support in collecting and completing documents proving investment costs in land;
• Guide customers to prepare necessary documents such as contracts, invoices, payment documents related to investing in land;
• Support in calculating compensation for remaining land investment costs according to the prescribed formula;
• Representing customers in the process of working with competent state agencies;
• Advise on solutions in case of disagreement with the compensation decision (If any).

With solid professional capacity and strict consulting process, Long Phan Consulting Company commits to accompany customers in claiming compensation for investment costs in land when land is revoked, ensuring that legal rights are maximally protected, in accordance with current legal regulations and in accordance with local practice.

Frequently asked questions

Below are frequently asked questions about compensation for investment costs when land is recovered.

What types of documents are accepted to prove investment costs in land?

Documents include documents, lease contracts, land leveling contracts, land improvement contracts, invoices, payment documents and other documents and contracts related to investment in land.

How are land leveling costs compensated?

Ground leveling costs are one of the investment costs in land that are considered for compensation when there are documents and documents to prove it.

How is the land use term calculated in the compensation formula?

Land use term (T1) is calculated from the time the investment in land begins, not necessarily from the time the land is allocated, if the investment takes place later.

If there are no documents proving investment costs, will people be compensated?

In case there are no records or supporting documents, the Provincial People’s Committee will base on the actual situation in the locality to determine the remaining investment costs.

What land reclamation costs are covered?

Reclamation costs increase soil fertility, remove acidity, and prevent erosion and erosion of agricultural land.

In what cases is the cost of ground reinforcement compensated?

Cost of reinforcing the bearing capacity against vibration and land subsidence for land used for production and business premises.

How does the compensation payment process work?

After the compensation plan is approved, compensation for remaining land investment costs will be paid directly to the person whose land is recovered.

Which agency is responsible for determining the remaining investment costs?

The organization in charge of compensation will determine the remaining investment costs.

Can people appeal compensation decisions?

People have the right to complain or sue if they do not agree with the compensation decision.

What changes does the Land Law 2024 have on compensation for investment costs in land?

The Land Law 2024 and Decree 88/2024/ND-CP have new, more detailed regulations on cases, conditions and methods of calculating compensation for investment costs in land.

Conclude

Compensation for investment costs when land is recovered is a legitimate right that customers need to grasp to protect their interests. Long Phan Consulting Company commits to accompany customers throughout the entire compensation claim process, from determining conditions, collecting documents to calculating appropriate compensation levels. Please contact us immediately via the hotline: 0906735386 for in-depth advice and timely support.