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, which amends and supplements Decision 02/2020 on land prices in Ho Chi Minh City, has greatly aided the city’s authorities 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the current land price framework sets agricultural land prices too low, resulting in budget shortfalls as locals have withdrawn their land transfer tax dossiers over the past time.
The Institute of Resource and Environmental Economics has conducted a scientific assessment of the market impact following the implementation of the land price framework per Decision 79/2024. The results indicate that the increased land prices have adversely affected the overall market in the city.
The Institute proposed adjusting agricultural land prices in Decision 79 to 65-70% of residential land prices.
This has led to reduced budget revenues 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 a noticeable impact 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 land price framework. As a result, many locals cannot 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 Chairman of the Ho Chi Minh City People’s Committee reevaluate the low agricultural land prices, which lack scientific basis and do not adhere to market principles as stipulated in Decree 71/2024.
Therefore, it is proposed to adjust the land price framework for the last six months of 2025 to alleviate the difficulties faced by locals and increase budget revenues 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 scope 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 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 parcels located within residential areas or those with residential land on the same plot.
