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 land price framework sets the price of agricultural land too low, resulting in budget difficulties as people withdrew their land-use tax dossiers over the past time.
The Institute of Resource and Environmental Economics has assessed the market impact of applying the land prices according to Decision 79/2024. The results indicate that the increased 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 led to reduced budget revenue from changing land use purposes, hindered the real estate market, and deeply impacted the construction materials market due to restrictions on new construction by locals. These changes have had noticeable ripple effects on people’s lives, including business premises rentals, purchasing power, and consumption. It will also 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, citizens 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 adjusted 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 considering that the new land price framework will take 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 re-evaluate the low-priced agricultural land and ensure scientific and market-based pricing according to Decree 71/2024.
Therefore, it is suggested to adjust the land prices for the last six months of 2025 to alleviate the difficulties of the people and increase budget revenues before the new land prices take effect on January 1, 2026, for the newly merged Ho Chi Minh City. The authority to make this adjustment lies with the Chairman of the Ho Chi Minh City People’s Committee, and it complies with the Land Law and related legal provisions.
The Institute of Resource and Environmental Economics proposes adjusting the price of agricultural land in Decision 79 to 65-70% of residential land prices. This adjustment applies to agricultural land located within residential areas or agricultural land on the same lot as residential land.
