Exemption from Land Use Levy when Selling Social Housing

Exemption from Land Use Levy when Selling Social Housing is a matter of particular concern for homebuyers wishing to transfer property after a period of use. Accurately determining financial obligations helps sellers calculate economic benefits and minimize risks. This article analyzes current legal bases, exemption conditions, and important notes.

What regulations must be met when selling social housing today?

The transfer of social housing does not follow the free market mechanism but is bound by strict conditions regarding technical standards and beneficiaries. Investors must strictly comply with regulations on design and selling prices approved by competent authorities.

According to Clause 1, Article 89 of the Law on Housing 2023, selling social housing must adhere to:

• Pre-conditions: Future-formed social housing can only be sold when ensuring Clause 3, Article 88; existing social housing when ensuring Clause 4, Article 88 of the Law on Housing 2023.
• Contracts: Must contain contents specified in Article 163 of the Law on Housing 2023.
• Payment Progress: The first advance payment shall not exceed 30% of the contract value (including deposit). Total payments before handover shall not exceed 70%, and before the issuance of the Certificate, not exceed 95%.
• Resale Restrictions: Buyers cannot resell the house within a minimum of 05 years from full payment.
  • Within 05 years: Can only resell to the investor or eligible subjects at a maximum price equal to the original contract price.
  • After 05 years: Can resell under the market mechanism to subjects with needs (if the Certificate has been issued).

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Regulations regarding cases where the sale of social housing is exempt from land use fees.

The policy of Exemption from Land Use Levy when Selling Social Housing is the most important financial lever to reduce housing costs. The Law on Housing 2023 clearly defines exemption cases based on investment capital sources and legal status.

In the case where the developer sells social housing

When the Investor Sells Social Housing

• Investors using State/Trade Union Capital: According to Clause 1 and Point a, Clause 2, Article 85 of the Law on Housing 2023, they are exempted from land use levy for the entire project area. Notably, administrative procedures are cut: no need for land valuation or application for exemption.
• Investors NOT using State/Trade Union Capital: According to Clause 2, Article 85 of the Law on Housing 2023 and Clause 2, Article 8 of Decree 100/2024/ND-CP, they are also exempted for the entire project area without land valuation or exemption application procedures.
  • Commercial Portion: According to Clause 4, Article 23 of Decree 100/2024/ND-CP (effective from Aug 01, 2024), investors can use up to 20% of the total residential land area for commercial business or commercial housing. For this commercial portion, investors do not have to pay land use levy, and profits are not accounted for in the social housing cost.

When Individuals Sell Social Housing

• Within 05 years: As resale is restricted to the investor or eligible subjects at the original price, the land use levy exemption mechanism remains. The seller does not pay land use levy.
• After 05 years:
  • According to Point e, Clause 1, Article 89 of the Law on Housing 2023, sellers must fulfill financial obligations to the State.
  • Specific Calculation: According to Article 42 of Decree 100/2024/ND-CP, when reselling individual social housing (nhà ở riêng lẻ) after 5 years, besides other taxes/fees, the seller must pay 50% of the land use levy according to land laws. The calculation time is the time of submitting a valid dossier for land use rights recognition.

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Expert advice on selling social housing.

• Cost Accounting: Investors must account independently. Construction costs for commercial works must not be included in the social housing cost. Mixing these costs to inflate social housing prices is a violation.
• Legal Procedures: Although exempted from land valuation, investors must still complete land allocation/lease procedures. The Land Allocation Decision is the legal basis for determining boundaries and exempted areas.

Long Phan Consulting provides consulting services on cases of exemption from land use fees when selling social housing.

Long Phan Consulting Company provides comprehensive solutions for complex social housing transactions:

• Review: Checking project dossiers against specialized laws to determine exempted land areas accurately.
• Calculation: assisting individuals in pre-calculating land use levies, personal income tax, and registration fees when reselling after 5 years.
• Representation: Working with state agencies to complete land allocation/lease dossiers and apply for Certificates (Red Books/Pink Books).
• Price Appraisal: Preparing dossiers and explaining data during the appraisal of social housing selling prices.
• Contracts: Designing sales/lease-purchase contracts with strict terms on payment and financial obligations.

Frequently Asked Questions about Selling Social Housing

Below are some frequently asked questions about accurately determining the land use fee exemption when selling social housing:

Does the investor have to pay land use levy for the commercial construction area?

No. For the commercial land area (maximum 20% of total residential land), the investor does not have to pay land use levy. (Legal Basis: Clause 5 Article 23 Decree 100/2024/ND-CP; Clause 2 Article 85 Law on Housing 2023).

How much land use levy must be paid when reselling individual social housing after 5 years?

The seller must pay 50% of the land use levy according to land laws, in addition to other taxes and fees. (Legal Basis: Article 42 Decree 100/2024/ND-CP).

What is the maximum total payment before social housing handover?

Total payments shall not exceed 70% of the contract value before handover. (Legal Basis: Clause 1 Article 89 Law on Housing 2023).

Can buyers freely resell social housing within 5 years?

No. It can only be resold to the investor or eligible subjects at a maximum price equal to the original contract price.

Does an investor constructing social housing using public investment capital need to perform the procedure to request land use levy exemption?

No. The investor is exempted from land use levy for the entire project area without having to perform procedures for land valuation or exemption application. Legal Basis: Clause 1 and Point a, Clause 2, Article 85 of the Law on Housing 2023.

Conclusion

Accurately determining the right to Exemption from Land Use Levy when Selling Social Housing is key for investors to build reasonable pricing plans and comply with the law. The new regulations in the Law on Housing 2023 require continuous updates. For detailed legal support, please contact Long Phan Consulting Company Hotline.1900636389.