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 greatly aided the local government in matters of compensation, resettlement, land rent calculation, and taxation.
However, the current land price framework sets agricultural land prices too low, resulting in budget difficulties as many locals have withdrawn their land-use tax registration over the past time.
The Institute of Resource and Environmental Economics has scientifically assessed the market impact of applying the land price framework per Decision 79/2024. Results indicate that the increased land prices have negatively affected the overall local market.
The Institute proposes adjusting agricultural land prices in Decision 79 to 65-70% of residential land prices.
This has led to reduced budget revenue from land-use conversion, hindered the real estate market, and caused a significant downturn in the construction materials market due to limited new construction initiatives 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, locals now have to pay 250-300% more in taxes when converting agricultural land to residential land due to the significant price gap between these land types in the city’s adjusted land price framework. This has resulted in many locals being unable to afford the increased land-use charges.
To ensure objectivity and compliance with the Land Law 2024, with the new land price framework coming into effect on January 1, 2026, the Institute recommends that the Chairman of the Ho Chi Minh City People’s Committee re-evaluate the low-priced agricultural land and ensure scientific pricing that adheres to market principles as stipulated in Decree 71/2024.
Therefore, to address the challenges faced by locals and increase budget revenues, it is proposed to adjust the land price framework 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. This adjustment of agricultural land prices within the framework of Decision 79/2024 is within the authority of the Chairman of the Ho Chi Minh City People’s Committee and complies with the Land Law and related legal regulations.
The Institute of Resource and Environmental Economics proposes adjusting agricultural land prices in Decision 79 to 65-70% of residential land prices within the land price framework. This adjustment applies to agricultural land located within residential areas or on the same plot as residential land.
