15-05-26 MTParners
Areas within the local residential land allocation limit are charged only 30% of the price differential. Those who paid land use fees between 1 August 2024 and 31 December 2025 may request recalculation under the new formula — deadline 1 January 2027.
On 31 January 2026, the Government of Vietnam issued Decree No. 50/2026/ND-CP providing detailed implementation of Resolution No. 254/2025/QH15 on special mechanisms to resolve difficulties in enforcing the Land Law. The decree creates a turning point for millions of households and individuals currently holding garden land, pond land, or agricultural land within the same parcel as residential land. Instead of paying 100% of the price differential when converting to residential land — as required under the original 2024 Land Law regime — citizens now pay only 30% of the differential for the area within the local residential land allocation limit.
The 2024 Land Law (Law No. 31/2024/QH15), in force since 1 August 2024, revealed a major implementation obstacle. Under the prior rule in Article 8 of Decree No. 103/2024/ND-CP, anyone converting agricultural land to residential land had to pay 100% of the differential between residential and agricultural land prices on the official land price schedule. With many provinces issuing new land price schedules approaching market value, this charge could climb to hundreds of millions — or even billions — of VND for large parcels, far exceeding most households’ financial capacity.
In response, on 11 December 2025 the 15th National Assembly passed Resolution No. 254/2025/QH15 (effective 1 January 2026), creating special mechanisms to resolve such bottlenecks, including reduced financial obligations for land use purpose conversion. Decree No. 50/2026/ND-CP dated 31 January 2026 formally implements this resolution and specifies the calculation formula and conditions.
This is the most significant change. Under point (c) of Clause 2 of Article 10 of Resolution No. 254/2025/QH15, as detailed in Decree No. 50/2026/ND-CP, land use fees when households convert garden, pond, or agricultural land within the same parcel as residential land to residential land are calculated in three tiers:
First, 30% of the differential between land use fees calculated at the residential land price and those calculated at the agricultural land price, for the converted area within the local residential land allocation limit.
Second, 50% of the differential for the area exceeding the limit but not more than 1× the residential land allocation limit.
Third, 100% of the differential for the area exceeding 1× the residential land allocation limit.
Illustrative example: assume the residential land allocation limit in a peri-urban commune is 200 m². If a household converts 300 m² of garden land to residential land, the charge will be: 30% of the differential for the first 200 m² (within the limit), plus 50% of the differential for the next 100 m² (above the limit but within 1× the limit). Compared with the previous 100% on the entire 300 m², savings can reach 60–70%.
Decree No. 50/2026/ND-CP imposes a key limit: the preferential mechanism applies ONLY ONCE per household or individual, and on ONE selected parcel. The applicant must commit to this in the conversion application itself.
This restriction prevents owners of multiple agricultural parcels from converting all of them at a discounted rate. As a consequence, households must carefully choose which parcel to submit first — there is no second opportunity for another parcel.
One of the most progressive features of Decree No. 50/2026/ND-CP is its transitional mechanism: any conversion decision issued from 1 August 2024 (when the 2024 Land Law took effect) to before 1 January 2026 may be recalculated under the new 30-50-100 formula upon request.
Where land use fees were already paid at the old 100% rate, the tax authority will refund the surplus or offset it against other financial obligations. The sole condition: the recalculation request must be submitted no later than 1 January 2027. This is a valuable but time-limited legal window — households that miss this deadline lose the retroactive right permanently.
With a reduction of up to 70% in land use fees, households in suburban and rural areas owning extensive garden and pond land stand to benefit most. Reduced financial pressure will also accelerate the legalisation of millions of mixed-use “half-agricultural, half-residential” parcels, helping clean up the real estate market and increase the supply of legally compliant housing.
However, land registration offices and tax authorities across provinces will face heavy caseloads throughout 2026 — especially in the final months as the retroactive deadline approaches. Citizens should file early to avoid bottlenecks.
First, review the family’s entire land portfolio and identify parcels containing garden, pond, or agricultural land within the same parcel as residential land — these are the priority targets for the new policy. Second, carefully select which parcel to file first, prioritising larger parcels with higher transfer value to maximise savings. Third, for those who paid the full 100% rate between 1 August 2024 and 31 December 2025, urgently prepare and submit recalculation requests before 1 January 2027. Fourth, verify the local residential land allocation limit (set by the provincial People’s Committee) to determine precisely the area eligible for 30% and 50% tiers.
MT & Partners Law Firm, with experienced lawyers in land law, real estate, and land-related taxation, is ready to assist clients in reviewing land use conversion files, preparing recalculation applications under Decree No. 50/2026/ND-CP, and maximising legal protection for their families. Contact our hotline 0987140772 or email info@mtpartners.vn for consultation.
(*) This article is for reference only and does not replace specific legal advice.
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