The Director of the Institute of Resource and Environmental Economics in Ho Chi Minh City has proposed to the city’s People’s Committee Chairman, Nguyen Van Duoc, to increase the price of agricultural land in the land price framework to 65-70% of residential land prices to reduce land use fees for locals.
Decision 79/2024 on amending and supplementing Decision 02/2020 on land prices in Ho Chi Minh City has helped the city’s authorities tremendously in compensation, resettlement, land rent calculation, and taxation.
However, the land price framework sets the price of agricultural land too low, resulting in budget difficulties as people have withdrawn their land-use tax dossiers over the past time.
The Institute of Resource and Environmental Economics has scientifically evaluated the market impact of applying the land price framework according to Decision 79/2024. Results show that the increased land prices have negatively affected the overall market in the area.
The Institute proposed adjusting the price of agricultural land in Decision 79 to 65-70% of residential land prices.
This has led to reduced budget revenue from changing land use purposes, hindered the real estate market, and deeply impacted the construction materials market due to restrictions on new construction by locals. These changes have had noticeable ripple effects on people’s livelihoods, with businesses facing challenges in maintaining their operations, and consumers reducing their spending.
According to Dr. Pham Viet Thuan, Director of the Institute of Resource and Environmental Economics, when submitting taxes for changing the purpose to residential land, people have to pay 250-300% more compared to before the land price framework took effect. This is because the adjusted land prices in Ho Chi Minh City have a large difference between residential and agricultural land prices. As a result, the land-use fee when changing the purpose has increased significantly, calculated by subtracting the agricultural land price from the residential land price, making it unaffordable for many locals.
To ensure objectivity and compliance with the Land Law 2024, and considering that the land price framework will take effect from January 1, 2026, the Institute of Resource and Environmental Economics recommends that the Chairman of the Ho Chi Minh City People’s Committee re-evaluate the set price of agricultural land when it is too low, lacking scientific basis, and not market-based as stipulated in Decree 71/2024.
Therefore, it is necessary to adjust the land price framework in the last six months of 2025 to address the difficulties of the people and increase budget revenue before the new land price framework takes effect from January 1, 2026, for the newly merged Ho Chi Minh City. The local authority has the authority to adjust the price of agricultural land in the land price framework according to Decision 79/2024, which complies with the Land Law and related legal regulations.
The Institute of Resource and Environmental Economics proposed adjusting the price of agricultural land in Decision 79 to 65-70% of the residential land price in the land price framework. The scope of this adjustment applies to agricultural land located in residential areas or agricultural land on the same lot as residential land.
