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price framework has set the price of agricultural land too low, leading to budget revenue difficulties as people have withdrawn their land transfer tax dossiers in the past year.
The Institute of Resource and Environmental Economics has reported on the market impact of applying the land price framework according to Decision 79/2024. The results show that the high land prices have negatively affected the overall market in the city.
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 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 construction by residents. This has had a clear ripple effect on people’s lives, with businesses having to pay higher rents, and reduced purchasing and consumption.
Especially, it will 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, people now have to pay 250-300% more in taxes when converting agricultural land to residential land due to the large difference in land prices set by the city.
This has led to a significant increase in land use fees, calculated by subtracting the price of agricultural land from the price of residential land, which many people cannot afford.
To ensure objectivity and compliance with the Land Law 2024, and in anticipation of the new land price framework coming into effect on January 1, 2026, the Institute of Resource and Environmental Economics recommends that the Chairman of the City People’s Committee re-evaluate the low-priced agricultural land, ensuring market principles as stipulated in Decree 71/2024.
Therefore, the land price framework needs to be adjusted in the last six months of 2025 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 adjustment of agricultural land prices in the land price framework under Decision 79/2024 is within the authority of the Chairman of the City People’s Committee and complies with the Land Law and related legal regulations.
The Institute of Resource and Environmental Economics proposed adjusting agricultural land prices in Decision 79 to 65-70% of residential land prices in the land price framework. The scope of adjustment includes agricultural land located in residential areas or agricultural land on the same lot as residential land.
