The HCM City Department of Natural Resources and the Environment has given answers and explanations to queries about the adjustment of the current land price framework set in accordance with Decision 02/2020.

The agency denied that the HCM City local authorities are setting up a new official price framework in accordance with the new land law. 

In principle, the first land price framework will be released and applied from January 1, 2026. After that, the framework will be adjusted annually and applied from January 1 of the following years.

Meanwhile, at present, the department is just making some adjustments with the current land price framework to more truly reflect market land prices. The adjustments will be valid from August 1 to December 31, 2025.

There are three problems in the current land price framework, including the limitation of the price frame, the land price adjustment coefficient (K) and the lack of updated information about resettlement land prices. The current framework is just being used for administrative procedures for six cases of land use.

Meanwhile, the land price framework in accordance with the 2024 Land Law is used for administrative procedures for 12 cases, including seven completely new cases, compared with the old Land Law.

According to the department, the land prices in the adjusted framework are set in reference to land prices based on which district people’s committees have approved and prices at successful transactions in the market. The prices in successful transactions in reality are provided by land registration agencies and taxation agencies.

Consultancy firm joined forces with local authorities to collect and analyze information, conduct surveys and compare prices to adjust the price of every route.

Regarding the principle of adjustment, the updated framework shows the prices of 557 more routes, which means that there are prices of 4,565 routes.

As for the 557 new routes, the consultancy firm used comparative method according to the 2024 Land Law to determine the prices. Similarly, the comparative method has also been used for the pricing of 4,008 routes (which were named in previous land price frameworks) with reference to real prices at transactions in the last two years.

Finally, the adjusted land prices (which are going to be released) are 7 times higher than prices in the current framework. However, analysts pointed out that the real increase is just 2.5 times, because the K coefficient is used when calculating land prices with reference to the current framework,

Under the adjusted land price framework, the prices of agriculture land in Thu Duc City, increases by VND4.5-6.7 million per sq m, or 20.3-30.6 times compared with the current framework.

As for the other eight districts (districts 7, 8, 12, Binh Tan, Binh Thanh, Go Vap, Tan Binh and Tan Phu) agriculture land prices have been raised by VND5.5-9.9 million per sq m, or 33-35 times. In four suburban districts, the agriculture land prices have increased by VND380,000-3.6 million per sq m, or 3.6-15.7 times.

The adjustments of land prices are believed to have an impact on real estate firms and lead to housing price increases. 

According to the HCM City Department of Natural Resources and the Environment, the land use fees of real estate projects are calculated with a surplus method. The results of land assessment in accordance with the method won’t have to be adjusted, even if they are higher or lower than prices in the framework.

The expected increase in agricultural land prices will reduce the difference in land rent, which would make it more transparent and reasonable for real estate firms to pay land use fees.

The price adjustments are also believed to impact production enterprises, because land is one of the input costs of enterprises.

The department said the adjustment will have influences in two cases, including the calculation of land use tax and land rents. In principle, land prices are the costs based on market conditions. Once land prices go up, the input costs of enterprises will increase proportionally.

Regarding the calculation of land use tax, according to the Law on Non-agriculture land use Tax, the land price framework used to calculate taxes will be stable for five years, starting January 1, 2012.

The current land price framework is in the third cycle and will terminate in December 2027, and the new land price framework will be applied from January 1, 2028.  Therefore, the adjusted land price framework won’t affect non-agriculture land from now to the end of 2027.

Anh Phuong