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 been instrumental in resolving issues related to compensation, resettlement, land rent, and taxes.
However, the current land price framework sets agricultural land prices too low, resulting in budget shortfalls as locals withdrew their land transfer tax dossiers.
The Institute of Resource and Environmental Economics has assessed the market impact of the land prices set by Decision 79/2024. The evaluation reveals that the increased land prices have adversely affected the city’s overall market.
The Institute proposes adjusting agricultural land prices in Decision 79 to 65-70% of residential land prices.
Consequently, it 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 projects initiated by locals. These changes have had a noticeable impact on people’s livelihoods, affecting business premises rentals, purchases, and consumption. It is also expected to influence the city’s double-digit growth target for 2025.
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 the two land types in the city’s land price framework. This has resulted in many residents being unable to afford the increased land use fees.
To ensure objectivity and compliance with the Land Law 2024, and in anticipation of the new land price framework taking effect on January 1, 2026, the Institute of Resource and Environmental Economics recommends that the People’s Committee Chairman reevaluate the low agricultural land prices, which lack scientific basis and market principles as stipulated in Decree 71/2024.
Therefore, it is proposed to adjust the land prices for the last six months of 2025 to alleviate the financial burden on locals and increase budget revenue before the new land price framework takes effect on January 1, 2026, for the newly merged Ho Chi Minh City. This localized adjustment of agricultural land prices under Decision 79/2024 is within the authority of the city’s People’s Committee Chairman and aligns with the Land Law and relevant legal provisions.
The Institute of Resource and Environmental Economics suggests 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.
