The Procedures of Residential Land Transaction in 2023

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What is residential land?

While the terms “land” and “residential land” are often used interchangeably, they have distinct meanings. Land encompasses all forms of terrain, including agricultural, commercial, industrial, and residential areas. In contrast, residential land refers specifically to a subset of non-agricultural land designated for residential purposes.

Legal Definition:

The 2013 Land Law defines residential land as non-agricultural land designated for the construction of houses and supporting structures for living, including gardens and ponds attached to the houses on the same land. This land use type is recognized by the state and documented in a certificate of land use rights, typically marked with the codes ODT or ONT.

Characteristics of Residential Land:

• Non-agricultural purpose: It cannot be used for farming, forestry, aquaculture, or animal husbandry.
• Dedicated to housing: It is primarily used for building houses and associated structures for residential purposes.
• Supports life: It provides space for living, including gardens and ponds for personal enjoyment and sustenance.
• Documented ownership: Land use rights are recognized by the state and documented in a certificate.

Differentiation from Other Land Types:

Residential land is clearly distinguished from other land types by its specific designated purpose and documented ownership. This distinction is crucial for land use planning, development, and regulatory purposes.

In summary, residential land is a specific type of non-agricultural land allocated for building houses and creating living spaces. Its legal status, documented ownership, and distinct purpose emphasize its importance as a fundamental component of urban and rural communities.

What is residential land?

Differences between residential land and foundation land

While the terms “residential land” and “foundation land” may seem related, they represent distinct concepts in land use and property development. Here’s a breakdown of their differences:

Residential Land:

• Definition: Non-agricultural land designated for building houses and associated living structures, including gardens and ponds.
• Legal Status: Recognized by the state and documented in a certificate of land use rights, typically marked with codes ODT or ONT.
• Purpose: Dedicated to housing and supporting structures for living.
• Characteristics:
  • Non-agricultural purpose.
  • Located in urban or rural areas.
  • May have existing infrastructure and utilities.
  • Subject to zoning regulations and building codes.
• Examples: Single-family homes, apartments, condominiums, gated communities.

Foundation Land:

• Definition: Land that is minimally affected by human activities, primarily referring to the soil itself.
• Legal Status: May not be formally recognized and documented with a specific land use code.
• Purpose: Serves as the base for constructing buildings and infrastructure.
• Characteristics:
  • Relatively undisturbed by human activities.
  • May not have existing infrastructure or utilities.
  • Not subject to zoning regulations or building codes unless designated for specific use.
• Examples: Undeveloped land, farmland, forests, mountains.

Key Differences:

Additional Notes:

• Project land: Refers to developed land with infrastructure, utilities, and transportation systems. This type of land can be residential, commercial, or mixed-use.
• Foundation land can be converted to residential land: Through development activities like leveling, filling, and construction, foundation land can be transformed into suitable land for building houses and communities.

Understanding the distinctions between residential land and foundation land is crucial for various stakeholders, including:

• Landowners: Knowing the legal status and potential uses of their land.
• Investors and developers: Identifying suitable land for specific projects.
• Government agencies: Planning land use and development regulations.
• Homebuyers and renters: Choosing properties with the desired features and legal status.

By clearly understanding these concepts, individuals and organizations can make informed decisions about land acquisition, development, and real estate transactions.

Differences between residential land and foundation land

Notes when buying residential land

Acquiring residential land is a significant decision, and careful consideration is essential to avoid future complications. Here are some important notes to remember:

1. Verify Land Use Rights:

• Ensure the seller possesses a valid Red Book, also known as the Land Use Rights Certificate. This document serves as official proof of ownership and land use rights.
• Verify the Red Book’s authenticity and validity with the issuing land management agency.
• Be cautious if the Red Book is missing or appears tampered with.

2. Absence of Disputes and Encumbrances:

• Confirm that the land is free from any ongoing or unresolved ownership or use disputes.
• Investigate if the land is subject to any mortgages or encumbrances by banks or other entities.
• Ensure the land has not been recovered by the authorities for legal enforcement purposes.

3. Validity of Land Use:

• Verify that the land use purpose is compatible with your intended use. Residential land cannot be used for agricultural purposes, and vice versa.
• Check if the land is located within an area with zoning restrictions that may affect your development plans.
• Confirm that the land use term is still valid and has not expired.

4. Additional Considerations:

• Conduct a land survey: This is especially important if the land boundaries are unclear or if there are disputes regarding the land area.
• Review the land’s history: This can reveal any potential environmental hazards, previous construction projects, or ownership issues.
• Consult with legal and land management professionals: These experts can guide you through the legal requirements and assist with negotiating the purchase agreement.

By diligently following these notes and conducting thorough due diligence, you can minimize risks and increase your chances of a successful and secure residential land purchase.

Required documents and papers for Residential Land Transaction 

Required documents and papers for Residential Land Transaction 

Taxes and Fees:

• Personal income tax declaration form 03/BĐS-TNCN
• Original copy of registration fee declaration
• Copy of Red Book (individuals must sign a commitment to take responsibility for the photocopy)
• Land use rights transfer contract
• Documents supporting tax and fee exemption (if applicable)

Notarized Records:

• Seller:
  • Land use rights certificate
  • Identity card/ID card/passport (both spouses) with clear expiry date
  • Household registration book
  • Documents proving marital status
  • Authorized contract (if applicable)
• Buyer:
  • Identification documents (citizen ID card, ID card, passport) with clear validity
  • Household registration book
  • Documents proving marital status

Change of Name on Red Book:

• Change registration form 09/DK
• Original issued certificate
• Notarized or authenticated land use rights transfer contract
• Documents supporting tax exemption (if applicable)
• Personal income tax declaration form 03/BD-TNCN
• Original registration fee declaration
• Proof of registration fee exemption (if applicable)

Additional Notes:

• All documents should be originals or certified copies.
• Ensure all documents are complete and accurate.
• Consult with legal and land management professionals for specific requirements and assistance.
• Follow the instructions and deadlines set by the relevant authorities.

By preparing the necessary documents and complying with legal requirements, you can ensure a smooth and successful residential land transaction.

The procedures of residential land transaction

Preparation and Application:

1. Gather necessary documents: Both buyers and sellers must prepare the required documents mentioned above.
2. Notarize the land use rights transfer contract: This document must be notarized or authenticated to be legally valid.
3. Submit application: Both parties need to submit the application and documents to the land management office, town/district People’s Committee, or notary office.

Financial Obligations:

1. Registration fees: Both parties are responsible for paying registration fees.
2. Personal income tax: Buyers may need to pay personal income tax depending on the transaction details.
3. Other fees: Additional fees may include certification, document appraisal, and measurement fees.

Tax Declaration:

1. Declaration deadline: Buyers need to declare and pay tax within 10 days of the contract’s effective date unless the contract specifies otherwise.
2. Fee declaration deadline: The deadline for declaring fees is the same as registering land use rights.

Document Review and Processing:

1. Document verification: The relevant agency will review the submitted documents to ensure their validity and legal standing.
2. Cadastral data update: The land use rights registration agency updates cadastral records and extracts cadastral data.
3. Tax assessment: The agency sends the cadastral data to tax authorities to determine financial obligations.
4. Certificate adjustment: If necessary, the agency adjusts or replaces the land use rights certificate.

Finalization:

1. Cadastral records update: The Land Office revises and updates cadastral records and changes in the land database.
2. Certificate issuance: You will receive either a revised certificate with confirmed changes or a new certificate, depending on the existing certificate’s condition.

Additional Notes:

• Ensure all documents are complete, accurate, and valid.
• Consult with legal and land management professionals for specific guidance.
• Follow the deadlines and instructions of the relevant authorities.
• This is a general guide, and specific procedures may vary depending on local regulations.

How long for change of Red Book’s ownership after a completed residential land transaction?

Once a residential land transaction is complete, the time for changing ownership in the Red Book (land use rights certificate) is as follows:

• Standard processing time: No more than 10 days from the date the authorities receive all valid documents.
• Extended processing time: For mountainous communes, islands, remote areas, and areas with challenging socio-economic conditions, the processing time may be extended by 10 days. This extension also applies to especially poor households.
• Exclusions:
  • Holidays and Tet holidays as prescribed by law
  • Time for document reception at the commune level
  • Time for the land user to fulfill financial obligations
  • Time for reviewing and handling illegal land use cases and soliciting opinions

Therefore, the actual Red Book ownership change timeframe can range from 10 to 20 days, depending on the specific circumstances.

How long for change of Red Book’s ownership after a completed residential land transaction?

The fees and costs of transferring land use rights

Transferring land use rights involves several financial obligations, including taxes and fees. Here’s a breakdown of the main costs:

1. Registration Fee:

• Paid by: Buyer
• Calculation:
  • Registration fee rate: 0.5%
  • Base amount: Land price frame (determined by the local People’s Committee)

2. Personal Income Tax:

• Paid by: Seller (although negotiation between parties is possible)
• Calculation:
  • Tax rate: 2%
  • Base amount: Transfer price (stated in the contract)

3. Other Fees:

• Appraisal fee: To assess the land’s value for tax purposes.
• Notary fee: For notarizing the land use rights transfer contract.
• Certification fee: For issuing certificates related to the transaction.
• Measurement fee: If the land boundaries require re-measurement.

Please note:

• Land price frames are determined by the local People’s Committee based on legal provisions.
• The specific fees and rates may vary depending on the location and the type of land.
• Additional fees may apply depending on the circumstances.

It’s essential to factor in these costs when budgeting for a land use rights transfer. Consulting with legal and land management professionals can help you understand the specific obligations and ensure a smooth, financially secure transaction.

Legal Basis

• 2013 Law on Land
• 2014 Law on Notarization
• 2007 Law on Personal Income Tax
• Government Decree No. 43/2014/NĐ-CP details the implementation of a number of the Law on Land articles

NT International Law Firm has addressed the question of what residential land is and the procedures of conducting transaction of such. If you have any further questions or concerns regarding land or real estate, please contact our law firm immediately for expert legal advice.

If you require any legal assistance, please feel free to reach out to us via phone at 090 252 4567 or through email: info@ntpartnerlawfirm.com. At NT INTERNATIONAL LAW FIRM, our team is committed to offering you prompt and personalized advice.

You also might be interested in: The 2013 Law on Land