THE PROCEDURE FOR TRANSFERRING LAND USE RIGHTS AS A GIFT
Article by Legal Specialist at Dai Ha Thanh Law Firm - Dinh Ngoc Bich - Bachelor of Law at Law University - Vietnam National University.
The gift of land use rights is a common form of asset transfer within families, particularly between parents and children. However, to ensure legality and prevent future disputes, parties must follow the correct procedures as prescribed by law. In this article, Dai Ha Thanh Law Firm will provide clients with a detailed guide on the process of transferring land use rights from parents to children.
1. What is the gift of land use rights?
According to Article 457 of the 2015 Civil Code: "A gift contract is an agreement between parties in which the donor transfers their property and ownership rights to the recipient without requiring compensation, and the recipient agrees to receive the gift."
Additionally, under Clause 1, Article 459 of the 2015 Civil Code: "The gifting of real estate must be made in writing, notarized, or authenticated, and registered if required by law."
Based on these definitions, the gift of land use rights is a civil transaction in which the donor (the land user) transfers their land use rights to the recipient (the person receiving the gift) without any obligation of repayment.
Specifically, in this case, land use rights will be legally transferred from parents to children through a gift contract. This transaction must be notarized and registered with the competent state authority to update the recipient's name on the land use certificate.
2. Conditions for Gift Land Use Rights
According to Clause 1, Article 45 of the 2024 Land Law, the conditions for exercising the gift of land use rights are as follows:
“1. Land users are allowed to exercise the rights to convert, transfer, lease, sublease, inherit, and gift land use rights; mortgage, contribute capital using land use rights when they meet the following conditions:
a) They possess a land use rights certificate, a certificate of homeownership and land use rights, a certificate of land use rights, homeownership and other assets attached to the land, or a certificate of land use rights and ownership of assets attached to the land, except in cases of inheritance of land use rights, land conversion in agricultural land when consolidating land for farming, gift land use rights to the state, community, or in cases specified in Clause 7, Article 124 and Point a, Clause 4, Article 127 of this Law;
b) The land is not in dispute or any disputes have been resolved by a competent state authority, a legally effective court judgment, decision, or an arbitral award;
c) The land use rights are not being seized or subject to other enforcement measures to secure judgment enforcement as prescribed by civil judgment enforcement law;
d) The land use rights are within the valid usage period;
đ) The land use rights are not under temporary emergency measures as prescribed by law.”
Based on the above provisions, when transferring land use rights, the following conditions must be met:
- The donor (parents) must possess a land use rights certificate (Red Book or Pink Book);
- The land must not be in dispute with others or among family members. If there is a dispute, it must be resolved before proceeding with the gifting procedure;
- The land use rights must not be subject to seizure to ensure judgment enforcement. If the land is being seized to ensure the fulfillment of obligations (e.g., due to debt, legal disputes), gifting the land cannot be carried out;
- The land use rights must be within the valid usage period. The usage period is the specific time frame within which the state grants individuals or organizations the right to use the land. Once the period expires, if it is not renewed or if renewal conditions are not met, the land use rights may be revoked;
- The provision regarding land use rights not being under temporary emergency measures ensures that the land can be legally transacted, is not in dispute, or is not blocked by a state authority. Therefore, before proceeding with the gifting procedure, the legal status of the land must be thoroughly checked to avoid risks and ensure the transaction is legally recognized.
Additionally, under Clause 3, Article 45 of the 2024 Land Law, land users must meet additional conditions depending on specific cases when exercising the right to gift:
- If they are behind on financial obligations or have outstanding debts related to the land, they must fulfill these obligations before proceeding with the gift of land use rights;
- In the case of gifting agricultural land for rice cultivation, if the recipient does not directly engage in agricultural production and the area exceeds the prescribed limit, they must establish an economic organization and have a plan for using the rice-growing land approved by the competent authority, unless the recipient is a legal heir.
3. Procedures for Parents to Gift Land Use Rights to Their Child
3.1. Notarization/Authentication of the Contract for Parents Gifting Land Use Rights to Their Child
According to Point a, Clause 3, Article 27 of the 2024 Land Law, when transferring land use rights from parents to their child, the gift contract must be notarized.
3.1.1. Procedures for Notarizing/Authenticating the Contract for Parents Gifting Land Use Rights to Their Child
3.1.1.1. Preparing the Application Documents
According to Article 40 of the 2014 Notarization Law, the parties must prepare the following documents:
- For Parents:
- Land Use Rights Certificate or Certificate of Home Ownership;
- Personal identification documents (ID card, Citizen ID, or Passport);
- Household registration book;
- Marriage certificate (to prove marital status).
- For the Child:
- Personal identification documents (ID card, Citizen ID, or Passport);
- Household registration book (if they have a separate household registration);
- Marriage certificate (if applicable).
Additionally, other essential legal documents for the gifting transaction include:
- Notarization request form (available at notarization service providers);
- Draft of the gift contract (if available). If not, the notarization office will be responsible for drafting the contract.
3.1.1.2. Notarization of the Contract by a Notary Public
The parties may choose to notarize the contract at a notary public office or authenticate it at the People’s Committee of the commune/ward in accordance with the law, ensuring the legal validity of the transaction.
3.2. Tax Declaration and Registration Fees
According to Vietnamese law, when parents gift land use rights to their child, the tax declaration and registration fees must be processed as follows:
3.2.1. Personal Income Tax (PIT)
According to Clause 4, Article 4 of the 2007 Personal Income Tax Law, the following incomes are tax-exempt: "Income from inheritance or gifts in the form of real estate between spouses; biological parents and biological children; adoptive parents and adopted children; parents-in-law and daughters-in-law/sons-in-law; paternal/maternal grandparents and grandchildren; and between siblings."
Thus, when parents gift land use rights to their child, the transaction is exempt from personal income tax. However, the tax declaration process must still be completed to obtain a tax exemption confirmation.
Documents required for PIT declaration:
- PIT declaration form (Form No. 03/BĐS-TNCN);
- Notarized copy of the Land Use Rights Certificate;
- Notarized copy of the gift contract;
- Notarized copy of documents proving the parent-child relationship (Birth certificate, Household registration book).
Deadline for PIT declaration: Within 10 days from the date the gift contract takes effect.
3.2.2. Registration Fee
According to Clause 10, Article 9 of Decree 10/2022/NĐ-CP, the following cases are exempt from registration fees:
“Houses and land inherited or gifted between spouses; biological parents and biological children; adoptive parents and adopted children; parents-in-law and daughters-in-law/sons-in-law; paternal/maternal grandparents and grandchildren; and between siblings, when granted a Land Use Rights Certificate by a competent authority."
Therefore, when transferring the land title from parents to their child, the transaction is exempt from the registration fee. However, the registration fee declaration must still be completed.
Documents required for registration fee declaration:
- Registration fee declaration form (Form No. 01/LPTB);
- Notarized copy of the gift contract;
- Notarized copy of the Land Use Rights Certificate;
- Notarized copy of documents proving the parent-child relationship (Birth certificate, Household registration book).
Deadline for registration fee declaration: At the same time as the land title transfer application.
3.3. Procedures for Transfer the Land Title from Parents to Their Child
3.3.1. Preparing the Application Documents
After completing the notarization of the gift contract and fulfilling the tax and fee declaration requirements, the next step is to register the land title transfer.
According to Article 29 of Decree 101/2024/NĐ-CP, the required documents for transferring the land title to the child include:
- Application for land use rights change registration, Form No. 11/ĐK (issued under Decree 101/2024/NĐ-CP);
- Notarized or authenticated gift contract;
- Original Land Use Rights Certificate;
- PIT declaration form (Form No. 03/BĐS-TNCN);
- Documents proving eligibility for tax and fee exemptions, such as household registration book, birth certificate of the child;
- Original registration fee declaration form (Form No. 01/LPTB).
3.3.2. Submitting the Application
According to Article 21 of Decree 101/2024/NĐ-CP, the application should be submitted to one of the following authorities:
- The One-Stop Administrative Office of the Provincial People's Committee;
- The Land Registration Office;
- A branch of the Land Registration Office.
When processing the land title transfer, the applicant must submit the documents to the competent authority.
If the application is submitted to the One-Stop Administrative Office of the Provincial People's Committee, it will be forwarded to the Land Registration Office for processing.
The Land Registration Office is responsible for verifying the application. If the application is incomplete or does not meet legal conditions, it will be returned with an official explanation. (According to Article 37 of Decree 101/2024/NĐ-CP).
The processing time shall not exceed 10 days from the date of receipt of a complete application, or 20 days for communes in mountainous areas, islands, remote areas, economically disadvantaged areas, and specially disadvantaged areas, as stipulated in Point a, Clause 2, Article 22 of Decree 101/2024/NĐ-CP.
After receiving a notification from the Land Registration Office, the applicant must collect the updated Land Use Rights Certificate. The recipient should carefully check the certificate for any errors and request corrections if necessary to protect their legal rights and avoid future legal risks.
The above information is the latest update from DHT Law Firm regarding the 2024 legal regulations on the procedures for parents to give land use rights to their child. We, Dai Ha Thanh Law Firm, with a team of highly trained lawyers and legal advisors, are committed to providing professional legal services to our clients. If you require detailed legal consultation, please contact us for expert legal support and solutions.
