The Procedure of Transferring Land Use Rights

Join NT INTERNATIONAL LAW FIRM to gain insights into the procedure of transferring land use rights. This article will provide you with a comprehensive understanding of the steps involved in transferring land and land use rights from the seller to the buyer, in accordance with the legal provisions.

What is land use rights transfer?

The transfer of land use rights involves a series of steps that facilitate the transfer of these rights from the seller to the buyer in compliance with the law. Therefore, it is essential for both parties to have a thorough understanding of the procedure.

The process of transferring land use rights is similar to regular real estate transactions, where land users have the freedom to transfer, convert, donate, or engage in other activities related to land use rights.

What is land use rights transfer?

What is land use rights transfer contract?

A land use rights transfer contract is a legally binding agreement between the land user (transferor) and the transferee (recipient) that stipulates the transfer of land and associated land use rights. The contract’s content, conditions, and form are governed by the Civil Code and land law.

Transfer of Land Use Rights

The transfer of land use rights typically involves the transferee paying the transferor a sum equivalent to the value of the transferred land use rights. This transfer can take various forms:

1. Transfer: This is the most common form of land use rights transfer, representing the typical nature of the transaction. The transferee acquires the right to exploit the land’s benefits and potential while assuming the responsibility to pay the transferor the agreed-upon transfer price.

2. Exchange: In this form, both parties exchange land use rights, effectively swapping their respective parcels. The exchange may involve additional payments or other considerations to balance the value difference between the exchanged land parcels.

3. Lending: The transferor lends their land use rights to the transferee for a specified period, after which the rights revert back to the transferor. The transferee pays a rental fee to the transferor during the lease period.

Contractual Requirements

Land use rights transfer contracts must adhere to specific legal requirements:

1. Written Form: The contract must be made in writing to ensure its validity and enforceability.

2. Licensing: The contract must be approved by a competent state agency to authenticate the transfer and ensure compliance with land use regulations.

3. Registration: The parties must register the contract with the corresponding People’s Committee to formalize the transfer and update land ownership records.

Benefits of Land Use Rights Transfer

Land use rights transfer offers several advantages:

1. Reduced Administrative Burden: It simplifies land management procedures by eliminating the need for land approval, recovery, and reallocation processes.

2. Enhanced Land Use Efficiency: It allows for efficient and flexible land use by enabling land users to transfer their rights to those who can better utilize the land.

3. Economic Growth: It facilitates economic growth by enabling land users to capitalize on the value of their land use rights and invest in more productive ventures.

4. Promote Land Use Rights for New Subjects: It facilitates the establishment of land use rights for new subjects without the need for land recovery and reallocation. This can encourage innovation and entrepreneurship in the agricultural and real estate sectors.

Conclusion

Land use rights transfer contracts play a crucial role in promoting efficient and equitable land management practices. By adhering to legal requirements and understanding the benefits of land use rights transfer, individuals and organizations can effectively utilize this mechanism to optimize land use and foster economic growth.

What is land use rights transfer contract?

The prerequisites of land use rights transfer

Land users are eligible to transfer land use rights if they fulfill the conditions outlined in Article 188 of the 2013 Land Law:

Article 188. Conditions for Exercising Rights to Convert, Transfer, Lease, Sublease, Donate, Inherit, and Mortgage Land Use Rights; Capital Contribution by Land Use Rights.

Land users can exercise the rights to transfer, convert, lease, sublease, donate, inherit, and mortgage land use rights; contribute capital using land use rights when the following conditions are met:

1. Possess a Land Use Rights Certificate: Land users must hold a valid Land Use Rights Certificate, except for cases specified in Clause 3, Article 186, and inheritance cases specified in Clause 1, Article 168 of the Law.

2. Absence of Land Disputes: The land must not be involved in any ongoing disputes or encumbrances.

3. Freedom from Distraint: The land use rights must not be subject to distraint for the purpose of enforcing a judgment.

4. Valid Land Use Term: The land must be within the valid term of use.

In addition to the conditions specified in Clause 1, Article 186, land users exercising the rights to transfer, convert, sublease, lease, inherit, or donate land use rights; the right to mortgage land use rights and contribute capital with land use rights must also fulfill the conditions specified in Articles 189, 190, 191, 192, 193, and 194 of the 2013 Land Law.

Effective Date of Land Use Rights Transfer

The conversion, transfer, inheritance, lease, sublease, donation, mortgage of land use rights, or capital contribution with land use rights must be registered at the land registration agency and will take effect from the time of registration in the cadastral book.

Essential Requirements for Land Use Rights Transfer

In summary, to successfully transfer land use rights, the parties involved must meet the following prerequisites:

1. Possession of a Land Use Rights Certificate

2. Absence of Land Disputes

3. Freedom from Distraint

4. Valid Land Use Term

5. Registration at the Land Registration Agency

By adhering to these requirements, land users can ensure a smooth and compliant land use rights transfer process, safeguarding their rights and interests.

The prerequisites of land use rights transfer

The Procedure of Transferring Land Use Rights

Transferring land use rights involves a series of steps to ensure a smooth and legally compliant process. Here’s a comprehensive guide outlining each step:

Step 1: Contract Signing

The transferor (land owner) and transferee (land buyer) must sign a contract to transfer land use rights. This contract should clearly outline the terms and conditions of the transfer, including the land parcel details, transfer price, and payment schedule.

Documents Required for Notarization:

1. Request form for notarization of contract (according to available form)
2. Draft transfer contract (if any)
3. Original ID card/CCCD, household registration book of the transferor and transferee
4. Certificate of marital status of the transferor or transferee (in case both parties are not married)
5. Original Certificate of land use rights
6. Copies of other documents related to the contract that are required by law

Additional Requirements:

In some localities, notary organizations may require appraisal results and field measurement results for the land to be transferred, obtained from the Department of Natural Resources and Environment.

Step 2: Financial Declaration

Visit the Land Registration Office to make a financial declaration. This involves submitting the following documents:

1. Certificate of land use rights (1 original + 2 certified copies)
2. ID card/CCCD, household registration of both transferors (2 certified copies)
3. Personal income tax declaration
4. Registration fee declaration
5. Documents to prove joint or separate property (confirmation of marital status, 2 notarized sets)
6. Notarized land use rights transfer contract
7. Certificate of land use rights (red book), 1 certified copy of ownership of housing and assets attached to land
8. 1 certified copy of ID card/CCCD, household registration books of the seller and buyer

Step 3: Declare Name Transfer Documents

Submit the following documents to initiate the name transfer process:

1. Application for registration of changes, signed by the seller or buyer (if authorized)
2. Notarized and authenticated transfer contract
3. Certificate of land use rights, original ownership of housing and assets attached to land
4. Original certificate of land use rights
5. Copy of household registration book and ID card of the transferee

Step 4: Pay Fees and Receive Certificate

Once financial obligations are fulfilled, pay the applicable fees to the Land Registration Office. Upon receipt of payment, the Land Registration Office will issue the Certificate of Land Use Rights to the transferee, officially transferring the land use rights.

The Procedure of Transferring Land Use Rights

Taxes and Fees Associated with Land Use Rights Transfer

The transfer of land use rights involves various taxes and fees that both the seller and buyer are responsible for bearing. These include:

Personal Income Tax on Land Use Rights Transfer

Personal income tax is levied on the seller’s income generated from the transfer of land use rights. The tax rate is calculated as 2% of the transfer price. For instance, if the land transfer price is 600,000,000 VND (approximately $25,500 USD), the personal income tax payable by the seller would be 2% x 600,000,000 VND = 12,000,000 VND (approximately $510 USD).

Land Registration Fees

Land registration fees are borne by the buyer and are determined using a formula based on the land area and unit price of land:

Registration Fee = 0.5% x (Area of Land Subject to Registration Fee (m2) x Price of 1 Square Meter of Land (VND/m2))

Additional Fees

In addition to the aforementioned taxes and fees, the parties involved in land use rights transfer may also incur the following expenses:

• Cadastral Fee: 15,000 VND (approximately $0.63 USD)
• Appraisal Fee: 0.15% of the transfer value, with a minimum of 100,000 VND (approximately $4.20 USD) and a maximum of 5,000,000 VND (approximately $210 USD)

Tax Considerations for Authorized Brokers

In cases where land use rights transfer transactions involve authorized brokers, these individuals are also subject to personal income tax on the income generated from their brokerage services. The applicable tax rate and calculations are similar to those for the land seller.

Taxes and Fees Associated with Land Use Rights Transfer

NT International Law Firm has addressed the question of the procedure of transferring land use rights. 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.

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