Conditions for receiving agricultural land transfer for commercial housing project

Conditions for receiving agricultural land transfer for commercial housing projects is a key factor to help investors access land funds in accordance with the law and planning orientation. Understanding the prescribed conditions will help investors carry out legal transfer transactions, conveniently change land use purposes, obtain approval for investment policies and implement projects in a transparent and effective manner, limiting arising legal risks.

Current agricultural land classification

Pursuant to Article 4 of Decree 102/2024/ND-CP, agricultural land in Vietnam is classified into main groups. Understanding the classification of agricultural land is an important basis to help real estate organizations accurately determine the type of land that can be accessed to develop commercial housing projects. Specifically:

1. Land for growing annual crops

Land for growing annual crops is land for growing crops that are planted, harvested and have their production cycles completed within a period of no more than one year, including annual crops that are saved at the root. This land group includes:

• Rice cultivation land: is land for growing one rice crop or more or growing rice in combination with other land uses permitted by law but mainly growing rice. This group includes specialized rice growing land (2 or more rice crops) and remaining rice growing land.
• Land for growing other annual crops: land for growing annual crops other than rice.

2. Land for growing perennial crops

Land for growing perennial crops is land used for the purpose of growing crops that are planted once, grow for many years and are harvested one or more times. This type of soil is often used to grow industrial crops, fruit trees, or medicinal plants with long growth cycles.

3. Forestry land

Forestry land is land used for the purpose of managing, protecting and developing special-use forests, protection forests and production forests according to the provisions of forestry law. Forestry land is classified into three types:

• Special-use forest land: is land on which there is a special-use forest according to the provisions of forestry law, land that has been allocated for the development of special-use forests.
• Protective forest land: is land on which there is protective forest according to the provisions of forestry law, land that has been allocated for the development of protective forests.
• Production forest land: is land on which there is production forest according to the provisions of forestry law, land that has been allocated, leased, or converted for the purpose of developing production forests.

4. Aquaculture land

Aquaculture land is land used specifically for the purpose of raising and growing aquatic products such as cultivating fish, shrimp, crabs, oysters and other aquatic creatures.

5. Concentrated livestock land

Concentrated livestock land is land to build concentrated livestock farms in separate areas according to the provisions of law on livestock farming.

6. Salt land and other agricultural land

Salt-making land is land used for the purpose of producing salt from seawater. Other agricultural land includes:

• Land for cultivating seedlings, breeding animals and land for growing flowers and ornamental plants;
• Land for cultivation, livestock raising, and aquaculture for study, research, and experimental purposes;
• Land for construction of greenhouses and other types of houses for farming and animal husbandry purposes;
• Land for construction works associated with agricultural production zones.

Clear classification of agricultural land not only helps organizations and individuals determine the correct use purpose but is also an important basis in planning, changing land use purposes, and implementing investment projects, especially in the field of agricultural real estate and commercial housing development.

Conditions for receiving agricultural land transfer for commercial housing projects

Resolution 171/2024/QH15 of the National Assembly and Decree 75/2025/ND-CP of the Government have specifically stipulated the conditions for real estate business organizations to receive the transfer of agricultural land for commercial housing projects. Real estate business organizations must clearly understand these conditions before implementing the project. The conditions for transferring agricultural land for commercial housing projects include:

Conditions for housing planning and development

According to the provisions of Article 3 of Resolution 171/2024/QH15, the scope of land areas and plots of land for project implementation must meet the following conditions:

• In accordance with district-level land use planning or construction planning and urban planning;
• In accordance with approved local housing development programs and plans;
• Included in the list of land areas expected to implement pilot projects approved by the Provincial People’s Council.

Compliance with planning is a prerequisite to ensure that the project develops in accordance with the overall development orientation of the locality, avoiding fragmented and unsynchronized development.

Conditions on administrative procedures

Real estate business organizations must have written approval from the Provincial People’s Committee on the agreement to receive land use rights to implement a pilot project in the following cases:

• Projects of real estate business organizations receiving land use rights;
• Or a project of a real estate business organization that has land use rights and receives land use rights.

In particular, in the case of using areas of defense land or security land that have been planned to be removed from defense land or security land to implement a pilot project, there must be additional written approval from the Ministry of National Defense for defense land and the Ministry of Public Security for security land.

Conditions on capacity of real estate business organizations

Real estate businesses must meet the conditions stipulated by laws on land, housing, real estate trading, investment, and other relevant legal regulations. This ensures that only enterprises with sufficient financial capacity, experience, and project implementation capability are eligible for receiving agricultural land transfer for commercial housing projects.

Article 9 of the Law on Real Estate Business 2023 clearly stipulates conditions for organizations and individuals when doing real estate business. Accordingly, organizations and individuals when doing real estate business must establish a real estate enterprise and meet the following general requirements:

• Not during the period of being banned from real estate business activities, suspended, or suspended under a court judgment or decision or decision of a competent state agency;
• Ensuring the ratio of outstanding credit debt and outstanding corporate bonds to equity;
• Real estate businesses through real estate projects must have equity capital of not less than 20% of total investment capital for projects with land use scale of less than 20 hectares, not less than 15% of total investment capital for projects with land use scale of 20 hectares or more and must ensure the ability to mobilize capital to implement investment projects; In case a real estate business simultaneously implements many projects, it must have enough equity allocated to ensure the above ratio of each project to implement all projects.

Range of land allowed to be transferred

Real estate business organizations implementing pilot projects that meet the above conditions are entitled to transfer land use rights and change land use purposes for:

• Agricultural land;
• Non-agricultural land is not residential land;
• Residential land and other land in the same land plot in case of agreement on receiving land use rights.

From the above regulations, it can be seen that receiving agricultural land transfer for commercial housing projects is not only a simple activity in terms of civil transactions, but a highly legal process, associated with urban development planning, land use plans and financial and legal conditions of the investor.

Criteria for selecting pilot projects to build commercial housing on agricultural land

Resolution 171/2024/QH15 regulates criteria for selecting pilot projects to build commercial housing on agricultural land. The selection of a pilot project is not only based on the conditions of the real estate business organization but also on the characteristics and location of the land where the project will be carried out. Criteria for selecting pilot projects are specified in Article 4 of Resolution 171/2024/QH15 as follows:

1. Project location criteria

The pilot project must be implemented in an urban area or area planned for urban development. This is to ensure that commercial housing development is consistent with urbanization orientation, and at the same time can take advantage of the technical and social infrastructure systems of the urban area.

2. Criteria for residential land area size

The total residential land area in pilot projects (including existing residential land and land expected to change land use purpose to residential land) must not exceed 30% of the increased residential land area during the planning period (compared to the current residential land use status) according to the approved land allocation and zoning plan in the provincial planning for the 2021-2030 period.

3. Cases were not selected as pilot projects

Projects that do not belong to the projects specified in Clause 4, Article 67 of the Land Law, specifically include:

• There has been an investment decision in accordance with the law on public investment under the authority to decide on investment policies of the National Assembly, the Prime Minister, heads of ministries, central agencies, provincial-level People’s Councils, and provincial-level People’s Committees;
• There has been a decision to approve the investment project in accordance with the law on investment in the public-private partnership method under the authority to decide on investment policies of the National Assembly, the Prime Minister, heads of ministries, central agencies, and provincial People’s Councils;
• There has been a decision to approve the investment policy, a decision to approve the investment policy and approve the investor at the same time, a decision to approve the investor in accordance with the law on investment under the authority to decide on the investment policy of the National Assembly and the Prime Minister;
• The project uses land for land acquisition.

In the case of a project of a real estate business organization receiving land use rights, the land area for implementing the pilot project must not be on the list of works and projects requiring land recovery approved by the Provincial People’s Council according to the provisions of Clause 5, Article 72 of the Land Law.

4. Authority to select pilot projects

The Provincial People’s Committee is responsible for submitting to the Provincial People’s Council for approval the list of land areas expected to implement pilot projects at the same time as approving the list of works and projects requiring land recovery. This ensures openness and transparency in the pilot project selection process.

5. Special regulations for national defense land and security land

For areas of defense land and security land that have been planned to be removed from defense land and security land that meet the conditions specified in Clause 2, Article 3 of Resolution 171/2024/QH15 but have not yet been handed over to local management, priority will be given to the Ministry of National Defense and the Ministry of Public Security to organize the implementation of pilot projects to prioritize sales, leases, and lease purchases for officers and soldiers of the armed forces.

Carry out land procedures to implement pilot projects

After the pilot project has its investment policy approved, the real estate business organization needs to carry out land procedures according to current law. These procedures include land recovery, land allocation, land lease, land use change, and registration for land use rights certificates.

In cases where land use rights belong to a real estate business organization with an approved investment policy, the main procedure that needs to be carried out is to change the land use purpose for the land area that must be changed. The process of changing the purpose of land use from agricultural land to residential land must comply with the provisions of land law.

In case an organization using land has a capital contribution contract, joint venture or association to establish a project enterprise but the land use rights are not transferred, this organization must return the land to the State. After that, the State recovered the land and allocated and leased the land to businesses established to implement the project. In this case, the organization using the land will not be compensated for assets on the land when the State recovers the land.

If the project is implemented in an area of ​​a production or business establishment that must be relocated due to environmental pollution or according to construction or urban planning but the land has not been certified, the relocated organization will return the land to the State. The State then recovers and allocates and leases the land to a real estate business organization established to implement the project.

Determining land prices and implementing land financial obligations for pilot projects is carried out in accordance with the provisions of land law, laws on taxes, fees, charges and other relevant regulations. This is an important financial aspect of the process of converting agricultural land to commercial residential land.

Consulting services for transferring agricultural land for commercial housing projects at Long Phan Consulting Company

With experience in the field of land law and accompanying many businesses in real estate business activities, Long Phan Consulting Company provides comprehensive consulting services on transferring agricultural land for commercial housing projects.

Long Phan’s consulting services include:

• Consulting and evaluating the project’s compliance with current legal regulations.
• Prepare documents to register the need to implement pilot projects.
• Support exchanges and working with agencies with provincial land management functions.
• Prepare documents to request approval from the Provincial People’s Committee on the agreement to receive land use rights.
• Instructions on the steps to carry out procedures for investment, construction and related procedures.

After the pilot project is approved for investment policy, Long Phan Consulting Company provides consulting services to implement land procedures, including:

• Procedures for changing land use purposes and other issues serving project implementation.
• Procedures for signing land lease contracts, land registration, and granting land use rights certificates.
• Consulting on determining land prices and fulfilling financial obligations related to land.
• Support in resolving problems that arise during the implementation of land procedures.

Long Phan Consulting Company also provides comprehensive consulting services on commercial housing projects on agricultural land, including:

• Consulting on conditions for transferring agricultural land use rights.
• Support negotiations and negotiations with land users.
• Drafting land use rights transfer contracts.
• Consulting on tax and fee issues related to agricultural land transfer.
• Support in resolving disputes that arise during project implementation.

With a professional working process and the ability to handle complex documents according to the outlined roadmap, Long Phan Consulting Company is a reliable partner to help customers complete procedures for transferring agricultural land for commercial housing projects legally, effectively and sustainably, while minimizing risks throughout the investment project implementation process.

Frequently asked questions about transferring agricultural land for commercial housing projects

Below are some frequently asked questions, please refer to:

What financial conditions do real estate business organizations need to meet when receiving agricultural land transfer for commercial housing projects?

Real estate business organizations must demonstrate financial capacity according to the provisions of law on investment, including equity capital to implement the project, which is not less than 20% of the total investment for projects with a land use scale of less than 20 hectares, and not less than 15% of the total investment for projects with a land use scale of 20 hectares or more.

What is the average time to complete the process of transferring agricultural land for commercial housing projects?

The average time to complete this process usually lasts from 12-24 months, depending on the project scale, the legal status of the land, and the complexity of local administrative procedures. The stage of preparing and approving the pilot project list can take 3-6 months, the investment policy approval procedure takes 3-4 months, and the remaining land procedures take about 6-12 months.

Are there any geographical restrictions on the transfer of agricultural land for commercial housing projects?

Yes, the project can only be implemented in urban areas or areas planned for urban development. In addition, the land area for the project must be consistent with district-level land use planning or construction planning and urban planning. In particular, the project cannot be implemented on high-quality rice land, special-use forest land, important protective forest land and nature conservation areas identified in the planning.

What are the main legal risks when receiving agricultural land transfer for commercial housing projects?

Main legal risks include: disputes over land use rights between related parties; change policies and regulations on land and planning; Obstacles in the site clearance process; issues of land origin and legality of documents; Difficulties in converting land use purposes due to not fully meeting the prescribed conditions; and risks of tax policy changes related to land transfer.

What are the main costs for transferring agricultural land for commercial housing projects?

Main costs include: compensation and site clearance costs; Land use fees when changing land use purposes; Related taxes, fees and charges (corporate income tax, value added tax, registration fees); costs for project appraisal and planning approval; legal consulting and brokerage costs; technical and social infrastructure development costs; and project management costs.

Are there any differences in the conditions for transferring agricultural land for commercial housing projects between regions?

Yes, although the common legal framework applies nationwide, there are differences in local implementation. Provinces and centrally run cities have the authority to detail a number of conditions appropriate to local characteristics. For example, big cities like Hanoi and Ho Chi Minh City and Da Nang often have stricter conditions on planning and the proportion of residential land in the project than other provinces.

How to determine land price when changing the use purpose from agricultural land to commercial residential land?

Land prices when changing the use purpose from agricultural land to commercial residential land are determined according to the specific land valuation method decided by the competent state agency. Normally, land price determination is done through the method of direct comparison, deduction, income, surplus or land price adjustment coefficient. Land price must reflect the market price at the time of change of use and be approved by the competent authority.

Conclude

Conditions for receiving agricultural land transfer for commercial housing projects are complex issues, requiring real estate business organizations to have in-depth knowledge and professional support. Long Phan Consulting Company with an experienced team is ready to support customers in the entire process from initial preliminary assessment to completing transfer procedures. Please contact us immediately via the hotline 0906735386 for detailed advice and answers to all questions.