Nguyen Thi Le (left), chairwoman of the HCM City People’s Council, at a People’s Committee meeting where the land price framework was announced for the next five years. — VNS Photo Bo Xuan Hiep

Speaking at an extraordinary People’s Council meeting on Wednesday, Nguyen Thi Le, chairwoman of the municipal People’s Council, said that the council has approved the People’s Committee’s proposal to keep the same land prices for the next five years.

However, new prices will be applied to land on 398 streets in 15 districts based on the public infrastructure that exists in these areas.

In addition, the People’s Committee has decided to increase the land price adjustment coefficient (coefficient K) this year at the High-Tech Park in District 9, among others.

Nguyen Toan Thang, director of the city’s Department of Natural Resources and Environment, said: “This is the first time the city government has decided to maintain the same land price framework for the next five-year period. The aim is to stabilise the city’s land prices.”

After approval by the People’s Council, the department will complete draft regulations on the price list for various types of land for the People’s Committee to implement for the next five years.

The land price list, which is adjusted every five years by the city government, serves as a basis for calculating land-use rights tax, imposing land administrative sanctions, and setting fines and compensation for the State for violations committed by individuals and organisations.

The land price adjustment coefficient is adjusted every year by the city government.

According to the current regulations, when the State wants to recover land from or calculate a land-use fee for real estate enterprises, authorities will appraise land prices for each specific case.

If households or individuals want to receive land-use rights or change the purpose of land use, they will have to pay a land-use fee based on the adjustment coefficient K issued annually by the People’s Committee.

Under such cases, the land price will be multiplied by the new coefficient. The coefficients for different land categories are revised every year to ensure set land prices are closer to market prices.

Since the market price of transferred land is up to four to six times higher than prices on the land price list, it is necessary to adjust the coefficient to suit reality.

According to the current land price list set by the city government, the area with the highest land price in HCM City includes Nguyen Hue and Le Loi streets in downtown area, which is set at VND162 million (about US$7,000) per sq.m, only a fifth of their estimated market price of VND800 million.

According to the land price list, the lowest urban land price in the city is VND1.5 million per sq.m. The price of land for commerce and service purposes is 80 per cent of the residential land price in the same area. Non-agricultural land used for other purposes such as healthcare and education is 60 per cent of the residential land price.

The highest price for agricultural land for rice, annual crops and aquaculture is VND205,000 per sq.m, while the perennial cropland price is VND300,000 per sq.m.

The market land price has significantly surged (up to 200 per cent) in recent years, mostly in districts such as 2, 7, 8, 9, 12, Binh Thanh, Tan Phu, Go Vap, Binh Tan, Thu Duc, Binh Chanh, Hoc Mon, Cu Chi, Nha Be and Can Gio, according to property experts.

Under the 2013 Land Law, the city and provincial people’s committees must submit new land prices every five years to the people’s councils for approval. The prices are published on January 1 at the beginning of the new five-year period. — VNS

Land prices set far higher

Many localities have raised their land prices by up to 70%, while on the national scale the Government is expected to issue a new price framework, driving up prices by 30%.  

Experts concerned over land price hike

Multiple experts have expressed concern over the Ministry of Natural Resources and Environment’s proposal to double the land prices, as higher prices will result in higher land use fees for businesses and residents.