Important notes when investing in agricultural land

Important notes when investing in agricultural land

Investing in agricultural land – Opportunity for whom?

Some types of agricultural land

In recent years, there have been many successful individuals and organizations from investing in large agricultural land, then subdividing lots for sale. Grasping this trend, many professional real estate investors have continuously searched for large agricultural land funds with development potential for investment. However, along with profit, it also comes with a lot of risks for inexperienced investors who do not understand the market, nature and legal regulations on this type of agricultural land. .

What is the concept of agricultural land?

According to the provisions of the current Vietnamese land law, agricultural land is allocated to the people to serve the needs of agricultural production, including all types of land with similar characteristics as the main means of production for the purposes of agricultural production. such as cultivation, animal husbandry, afforestation... Agricultural land is the main means of production, both a labor document and an object of labor, and especially irreplaceable of the agro-forestry industry, as money. subject of all production processes. Agricultural land is involved in food and food production industries such as fisheries, cultivation and animal husbandry.

Types of agricultural land available

According to the provisions of the Land Law 2013, based on the purpose of land use, agricultural land is divided into many different types of land, including:

Firstly, agricultural land for annual crops

 In fact, agricultural land for the purpose of growing annual crops is the type of land used to grow crops with a very short time to grow and harvest, such as cash crops and rice plants. To determine this land is annual crop land, the competent authority shall base on the current land use status and then issue a certificate of land use right.

Second, agricultural land is used for livestock

Agricultural land with the purpose of raising livestock is a type of agricultural land with the main purpose of raising livestock for the purpose of raising livestock, poultry, etc.. for example, land specialized in growing natural grass as fodder for livestock.

Third, land for perennial crops

Agricultural land with the purpose of growing perennial crops is the land for growing plants with a growth period of more than one year. Agricultural land for perennial crops and agricultural land for annual crops are different in the time of growth and harvest time, not based on the short or long use time of the land.

Fourth, production forest land

According to the land law, production forest land is one of the very important parts of agricultural land, which is natural forest, but this land is allocated by the State to organizations for the purpose of management, protection and development. forest development.

Fifth, protective forest land.

Agricultural land as protection forest is land used for the purpose of protecting water sources, protecting the land, as a part to help prevent erosion, limit natural disasters, and balance the ecological environment and the environment. climate conditioning.

Sixth, special-use forest land

Agricultural land is a protection forest established with the main purpose for the purpose of preserving nature, balancing the national forest ecosystem, in addition, for the purposes of serving scientific research, combining economic development such as scenic spots, amusement parks, or considered as historical relics that need to be protected.

Seventh, land for aquaculture and land for salt production

For aquaculture land, it is usually land for aquaculture, usually inland areas including ponds, lakes, rivers, streams, etc.. lands with water surface including allocated farms. for the purpose of aquaculture and development of the aquaculture industry

Eighth, other agricultural land

Other agricultural land includes land used for construction of greenhouses and other types of houses for cultivation purposes, including forms of cultivation not directly on the land; building livestock barns permitted by competent authorities; land for cultivation, animal husbandry and aquaculture for the purpose of study, research and experiment; nursery land for seedlings and seed for agriculture

What is the term of agricultural land use?

 The time limit for land allocation and recognition of agricultural land use rights for households and individuals directly engaged in agricultural production is specified in Clauses 1, 2, and b, Clause 3, 4 and 5, Article 129 of this Decree. The Law of the Land is 50 years. Upon the expiration of the time limit, households and individuals directly engaged in agricultural production may continue to use the land according to the time limit specified in this Clause if they have a need.

Regulations on the transfer of land use rights

For households and individuals, when there is a need to change the purpose of agricultural land use, it will be verified and approved by the District People's Committee. In case households and individuals apply for permission to change agricultural land use purposes for commercial or service purposes with an area of ​​0.5 hectares or more, a written approval from the People's Committee is required. provincial level before deciding;

The case for organizations that want to change the land use purpose will be decided by the Provincial People's Committee.

Legal documents of different types of agricultural land

Normally, with agricultural land, there will be two main legal forms: green book and red book.

Green book is a certificate of land use right issued by Lam Truong for management, exploitation and afforestation with a definite term. In other words, the green book is a certificate of long-term land lease of Lam Truong; When the green book expires, that land may be recovered by Lam Truong if the locality has not had a policy to allocate land to people.

Red book is a certificate of land use right issued by the Department of Natural Resources and Environment or the People's Committee of the district, depending on the specific conditions of each locality.

Through this, it can be seen that with agricultural land with such a book, the legality will be safer and more valuable than the green book.

Agricultural land transfer limit

Limits for receiving the transfer of land use rights for planting annual crops, land for planting perennial crops, land for production forests being planted forests, aquaculture land and salt production land for each household or individual for use for the following purposes: Agriculture is applied to forms of land use right transfer, donation, debt settlement as agreed in the land use right mortgage contract, specifically as follows:

1. Land for planting annual crops, land for aquaculture and land for salt production

a) Not more than 30 hectares for each type of land for the provinces and centrally-run cities in the Southeast region and the Mekong Delta region;
b) Not more than 20 hectares for each type of land for the remaining provinces and centrally-run cities.

2. Land for perennial crops

a) Not more than 100 hectares for communes, wards and townships in the delta;
b) Not more than 300 hectares for communes, wards and townships in the midland and mountainous areas.

3. Production forest land is planted forest

a) Not more than 150 hectares for communes, wards and townships in the delta;
b) Not more than 300 hectares for communes, wards and townships in the midland and mountainous areas.

Some notes on the transfer and receipt of agricultural land include:

1. In case households and individuals receive the transfer of agricultural land use rights in many provinces and centrally run cities, the total area to be transferred is within the limit for each type of land (land for planting crops). annually, land for planting perennial crops, land for production forests being planted forests, land for aquaculture and land for salt production) equal to the quota for receiving the transfer of land use rights in the province or centrally run city with the limit for receiving the transfer. highest land use rights.

2. In case households and individuals receive the transfer of agricultural land use rights, including many types of land (land for planting annual crops, land for planting perennial crops, land for production forests being planted forests, land for aquaculture and land for salt production), the quota for receiving the transfer of agricultural land use rights of such household or individual shall be determined according to each type of land according to current regulations.

6. Households and individuals that have used agricultural land in excess of the prescribed limit for receiving right transfer and have registered for land use right transfer before July 1, 2007, the excess land area may continue to use be used as in the case of agricultural land within the concession limit.

Risks of investing in agricultural land

Normally, when investing in agricultural land, if the investor is not directly involved in production, what investors are most interested in is whether the land can be converted for use. Because if converted, the future growth value will be huge.

However, to know this in addition to financial knowledge, the most important thing is to have a good relationship with people who know the planning where you plan to invest. If you only invest according to the crowd, information from the market, you are usually just a chess piece in the chessboard.

One thing is for sure, if the agricultural land you invest in is under the local reserve plan. In the future that land fund will serve the development goals of wards and communes, the conversion of use purposes is not possible.

Not to mention that the land will be acquired or compensated according to the agricultural land price with negligible compensation.