The Art of Balancing Interests: A Guide to Land Price Adjustments in Ho Chi Minh City

On the afternoon of August 12th, the Ho Chi Minh City Union of Vietnam Fatherland Front organized a conference to review the social impact of the draft decision to adjust Decision 02/2020 of the Ho Chi Minh City People’s Committee on land prices in the city.

Ms. Nguyen Thi Kim Thuy, Vice Chairman of the Ho Chi Minh City Union of Vietnam Fatherland Front, stated that Decision 02/2020, which regulates land prices in the city, has become outdated and no longer aligns with legal regulations and the city’s practical needs after its implementation.

Specifically, the land price table has not kept up with market prices, and its scope of application is limited, only applicable to 8 cases of administrative procedures related to land. The cycle of land price table construction is lengthy (5 years), making it challenging to update market fluctuations. Additionally, the lack of resettlement land prices has hindered the timely disbursement of public investment capital for key projects and works in the city.

Ms. Thuy expressed her hope that the new land price table, once applied, would contribute to expediting compensation and site clearance for many projects in the city, such as the Ring Road 3, Rach Xuyen Tam, and Kenh Doi. As the new prices are closer to market values, they are more likely to gain consensus from the people since support and compensation levels will increase. Key projects and works funded by the state budget will also stay on schedule without bottlenecks.

Moreover, implementing the new land price table will help stabilize and promote the city’s socio-economic development, ensuring a more transparent market. It will address the shortcomings of the current land price table and ensure fairness in financial obligations related to land for the people.

“With this purpose and significance, on behalf of the Standing Committee of the Vietnam Fatherland Front Committee of Vietnam, I propose that delegates focus on key contents such as the scope of adjustment, applicable objects, land price tables, and the time frame for land price application,” said Ms. Thuy.

Speaking at the conference, lawyer Nguyen Van Hau, Vice Chairman of the Ho Chi Minh City Bar Association, emphasized that the adjusted land price table should balance the interests of the state, land users, and investors.

Lawyer Hau suggested considering the timing of issuing the decision to replace Decision 02/2020. From his perspective, the proposed content is impractical and financially burdensome for citizens and businesses, especially in outlying districts where there is a demand to change the land use purpose from agriculture to residential for their children’s settlement. He pointed out that many families in Binh Chanh and Cu Chi have struggled to afford the costs of land division and change of land use purpose across generations. If the draft is approved, the significant price increases in many places will create difficulties for the people.

Additionally, higher land prices will lead to increased investment costs, dampening enterprises’ and investors’ enthusiasm for project investment. Increased land prices will also result in higher compensation costs, affecting public and private investment projects and input costs, creating pressure to raise land prices.

“Consequently, this will lead to an increase in the prices of goods and adversely affect social housing projects when enterprises take over land for project implementation. Therefore, more time is needed for adjustments and a comprehensive impact assessment before implementing the new land price table,” Lawyer Hau recommended.