Asking to remove the land price framework and then setting prices for agricultural land in residential areas is seen as unreasonable.

Many households in Nghe An and Ba Vi (Hanoi) have complained about excessively high land-use fees they have to pay when converting agricultural to residential land. Under current regulations, fees are calculated on the disparity between residential and agricultural land prices. 

The disparity in the official land price framework announced by local authorities is very wide. The problem is that agricultural land is priced low, while residential land is very high, which is close to the actual market price.

Tran Duy Dong and Nguyen Thi Hong, residing in Hung Loc Ward, Vinh City (Nghe An), said they have to pay nearly VND4.5 billion in land use fees to convert 300 sq m of garden land (adjacent to a cemetery) to residential land.

The Nghe An Department of Agriculture and Environment said the land-use fee for this plot is calculated based on the residential land price of VND15 million/sq m and the agricultural land price of VND85,000/sq m shown in the land price table set by local authorities.

Pham Viet Thuan, Director of the HCM City Institute of Economic Resources and Environment, noted that when drafting Decree 103/2024 on land-use and land lease fees, the Ministry of Finance requested the Ministry of Natural Resources and Environment (now the Ministry of Agriculture and Environment) to provide data for evaluation to avoid sudden increases in land-use fees across localities.

The expert pointed out a contradiction in Articles 8 and 9 of Decree 103. Those who still don’t have a red book (land-use right certificate) and want to obtain a new red book for residential land have to pay 20 percent of land use fee, while those who have a red book must pay 100 percent when converting land-use purposes.

“Perhaps the decree was drafted without sufficient data, leading to these inconsistencies,” Thuan said.

Also according to Thuan, the land price tables issued by provinces and cities set agricultural land prices arbitrarily, not in line with Decree 71/2024.

“It must follow Resolution 18 on land use management and Decree 71/2024 on land pricing to determine agricultural land prices. It is unreasonable to request to abolish the land price framework but fix agricultural land prices within residential areas since this is inconsistent with the Land Law,” he said. 

“There must be 14 types of agricultural land and at least 14 different prices,” Thuan emphasized.

Thuan pointed out that Article 8 of Decree 103 omitted the percentage multiplication calculation, leading to inconsistencies in Articles 8 and 9.

Agricultural land prices 

Thuan said the HCM City Institute of Economic Resources and Environment has proposed increasing the price of agricultural land with residential land planning in the land price list according to Decision 79/2024 on amending and supplementing Decision 02/2020 of HCM City People’s Committee on land-price lists in the area.

Thuan stated that the current land price table sets agricultural land prices too low, lacking scientific basis and failing to ensure market principles under Decree 71, necessitating adjustments.

Specifically, the Institute proposed that HCM City adjust the price of agricultural land located within residential areas planned for residential use, or plots with agricultural land not yet converted to residential use, as stipulated in Decision 79, to be equal to 65-70 percent of the official residential land price.

Agricultural land which has not been planned for residential use should not be adjusted upward to support long-term development of projects and industrial zones.

According to the Institute’s calculations, if the proposed prices get approved, people converting land use would pay land use fees 2.5-3 times higher than before, when the new land price table took effect. This approach is believed to help balance the interests of the state and citizens while addressing real estate market challenges.

Meanwhile, Nguyen Van Dinh, Vice Chair of the Vietnam Real Estate Association, argued that agricultural land value depends on its economic exploitation potential. If the land has no economic value, increasing its price is challenging.

Under the Land Law, agricultural land can be used for multiple purposes, such as operating restaurants, tourism areas, or experiential spaces. Thus, Dinh thinks that agricultural land prices should not increase by a fixed percentage. Adjustments should only be made when economic exploitation yields clear benefits.

Hong Khanh