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 taxes.
However, the published land price framework has set the agricultural land price too low, leading to budget difficulties as people withdrew their land-use tax dossiers over the past time.
The Institute of Resource and Environmental Economics in Ho Chi Minh City has also reported on the scientific assessment of the market impact of applying the price table according to Decision 79/2024. The results showed that the high land price increase has negatively affected the general market in the area.
The Institute of Resource and Environmental Economics proposed adjusting the price of agricultural land in Decision 79 to 65-70% of residential land prices.
This includes reducing state budget revenue from changing the purpose of land use, hindering the real estate market, and deeply affecting the construction materials market due to new restrictions on construction by locals. The impact on the people’s lives is evident in business ground leases, reduced purchases, and consumption. It will also affect 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, when paying taxes to change the purpose to residential land, people have to pay 250-300% more than before the land price framework took effect. This is because the adjusted land price range in Ho Chi Minh City has a large difference between residential and agricultural land prices. As a result, the land-use fee when changing the purpose increases sharply, calculated by subtracting the agricultural land price from the residential land price, making it unaffordable for many locals.
To ensure objectivity in the spirit of the 2024 Land Law and the first applied land price framework, which 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 reconsider and re-evaluate the set price of agricultural land when it is too low, lacking scientific basis, and not ensuring market principles under Decree 71/2024.
Therefore, to address the difficulties of the people and increase budget revenues, the land price framework needs to be adjusted in 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 local authority has the authority to adjust the price of agricultural land in the land price framework locally, which does not violate the Land Law and is consistent with related legal provisions.
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 plots in residential areas or agricultural land in the same plot with residential land.
