30th Invitation
On May 7th, Ho Chi Minh City’s Department of Natural Resources and Environment announced its 30th open competitive invitation for consulting firms to appraise land prices for various properties. Despite numerous prior invitations, there has been a lack of participation. The department is specifically seeking appraisals for a 59,530 sqm plot of land in Hoc Mon district, intended for residential development by An Thinh Investment and Construction JSC. The project, approved in 2010, includes 231 semi-detached houses and 52 linked villas, but the specific land price to determine the investor’s financial obligations has not been established.
ZeitGeist City Nha Be project has yet to finalize land-related financial obligations after 4 years.
Similarly, the department has issued its 30th invitation for appraisals of a 4,400 sqm plot in Hoc Mon district, intended for a commercial development by Thanh Chinh Construction and Trading Co., Ltd. This project was approved in 2011 but is also awaiting land price determination for financial obligations.
Since 2015, the department has advised and obtained approval for land price decisions for over 500 projects, resulting in the issuance of more than 109,826 land-use certificates and generating approximately VND 86,700 billion in land-use fees, averaging over VND 10,000 billion per year. However, recent inspections, audits, and investigations related to land price determination have caused concerns among officials, leading to hesitation, avoidance, and conservative advice in some cases.
Another site, a 7,458 sqm plot on Phan Van Tri Street in Go Vap district, leased by Saigon Passenger Car Company from the Ho Chi Minh City People’s Committee, has seen 29 unsuccessful invitations for competitive selection of land appraisal firms. The department has set a bidding price range of VND 9.3 million to VND 18.7 million per dossier for the consulting firms’ appraisals.
The department’s website also features the 12th notification for the competitive selection of consulting firms to appraise land prices for The Harmona apartment building in Tan Binh district. While the building has been delivering units since 2013 and residents have been receiving certificates since 2016, only about 300 out of 582 apartments have been granted certificates due to unresolved land-related financial obligations. Similar situations have occurred with other apartment buildings, including Premium Central in District 8, Moon Light Boulevard in Binh Tan district, Richmond City in Binh Thanh district, and Saigon Mia in Binh Chanh district.
Many companies’ land plots have gone appraised for over a decade, despite numerous invitations.
Bottleneck
For over four years, Ho Chi Minh City has been unable to finalize land prices for the ZeitGeist City project in Nha Be district, a 350-hectare development by GS E&C of South Korea. While construction began in late 2019 and some housing units have been delivered, the developer’s land-related financial obligations remain unresolved.
In December 2014, the Ho Chi Minh City People’s Committee approved a land-use rights value of VND 3,214 billion for the project. However, in April 2017, the State Audit Office recommended re-evaluating the land price. In March 2020, the People’s Committee directed the Department of Natural Resources and Environment to lead the re-evaluation process, but despite nearly a dozen invitations, no firm has participated in determining the land price for this project.
According to the department, Ho Chi Minh City currently has nearly 200 stalled projects awaiting specific land price determination, impacting the “freezing” or temporary halt of legal procedures for hundreds of real estate projects. Additionally, nearly 80,000 land plots and apartments in the city have not been granted certificates due to unresolved land-related financial obligations.
The Harmona apartment building has nearly 300 units without certificates due to unresolved additional financial obligations.
Severe Consequences
Previously, under the 2003 Land Law, the calculation of land use fees was the responsibility of the Department of Finance. Since 2014, with the enactment of the 2013 Land Law, this task has been assigned to the Department of Natural Resources and Environment. Consequently, most land-use fee calculations have been delayed, repeatedly supplemented, or transferred between different departments. The process of land price appraisal and determination of land use fees has been protracted.
According to the Department of Natural Resources and Environment, nearly 100 enterprises in Ho Chi Minh City are registered to operate in land price appraisal. However, in reality, fewer than 10 enterprises perform this function.
Real estate businesses face financial imbalances as they cannot launch their products to recoup investments. Consequently, foreign investors have taken over local projects, especially those in prime or sensitive locations. Residents who have purchased land or apartments in projects with unresolved land-related financial obligations express frustration. More importantly, the loss of trust from investors and the public undermines the effective utilization of land resources for development.
