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land price framework has set the price of agricultural land too low, resulting in budget difficulties as people have withdrawn their land-use tax dossiers over the past time.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 in Ho Chi Minh City has also submitted a scientific assessment report on the market impact of applying the land price framework according to Decision 79/2024. The results show that the high 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, hindering the real estate market and deeply affecting the construction materials market due to limited new construction by locals. There have been evident cascading effects on people’s lives, including higher business premises costs, reduced purchasing, and consumption. It will also impact the city’s double-digit growth target for 2025.
According to Dr. Pham Viet Thuan, Director of the Institute of Resource and Environmental Economics in Ho Chi Minh City, locals now have to pay 250-300% more in taxes when converting agricultural land to residential land due to the significant price difference between the two types of land in the city’s adjusted land price framework. This has resulted in many people being unable to afford the land use fees.
To ensure objectivity and compliance with the Land Law 2024, and considering that the new land price framework will take effect on January 1, 2026, the Institute of Resource and Environmental Economics in Ho Chi Minh City recommends that the Chairman of the City People’s Committee re-evaluate the low-set agricultural land prices, which lack scientific basis and do not guarantee market principles as stipulated in Decree 71/2024.
Therefore, to address the challenges faced by the people and increase budget revenues, the land price framework needs to be adjusted for the last six months of 2025, before the new land price framework takes effect on January 1, 2026, for the newly merged Ho Chi Minh City. The City People’s Committee Chairman has the authority to adjust the agricultural land prices in the land price framework under Decision 79/2024, which is in line with the Land Law and related legal provisions.
The Institute of Resource and Environmental Economics in Ho Chi Minh City proposes adjusting agricultural land prices in Decision 79 to 65-70% of residential land prices in the land price framework. The scope of this adjustment applies to agricultural land plots within residential areas or agricultural land within the same plot as residential land.
