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 the people.
Decision 79/2024 on amending and supplementing Decision 02/2020 on land prices in Ho Chi Minh City has helped the city’s authorities greatly in compensation, resettlement, land rent calculation, and taxes.
However, the land price framework has set the price of agricultural land too low, leading to budget revenue difficulties as people have withdrawn their land-use tax dossiers in the past year.
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 high land prices have negatively affected the overall market in the city.
The Institute proposed adjusting the price of agricultural land in Decision 79 to 65-70% of residential land prices.
This has reduced budget revenues from changing land use purposes, hindered the real estate market, and deeply impacted the construction materials market due to restrictions on new constructions by residents. These changes have had a clear ripple effect on people’s lives, affecting business premises rentals, purchases, 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, when paying 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 increases significantly, calculated by subtracting the agricultural land price from the residential land price, making it unaffordable for many residents.
To ensure objectivity in adherence to the Land Law 2024 and the land price framework that will take effect on January 1, 2026, the Institute of Resource and Environmental Economics proposed that the Chairman of the 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, to address the people’s difficulties and increase budget revenues before the new land price framework takes effect on January 1, 2026, for the newly merged Ho Chi Minh City, the land price framework needs to be adjusted in the last six months of 2025. The authority to adjust the price of agricultural land in the land price framework under Decision 79/2024 rests with the Chairman of the City People’s Committee, in compliance with the Land Law and 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 located in residential areas or agricultural land on the same lot as residential land.
