Proposed Abolition of Market-Based Land Valuation Starting 2026

Fluctuations from 0.2 to 3 Times

In the document from the Ho Chi Minh City Institute of Natural Resources and Environment Economics (IEEr) regarding the construction of land price tables submitted to the Secretary and Chairman of the Ho Chi Minh City People’s Committee, IEEr asserts that to stabilize the macroeconomy, the development of a scientifically based land price table is a prerequisite for Ho Chi Minh City’s growth.

IEEr emphasizes that the construction of land price tables has been directed by the Politburo to establish a base price table multiplied by a land price adjustment coefficient (coefficient K), to be applied from January 1, 2026. This aims to stabilize real estate prices and meet the social housing needs of workers.

Therefore, IEEr recommends that Ho Chi Minh City leaders adopt a land price table based on the pre-2024 Land Law effective price table (as per Decision 02/2020) multiplied by coefficient K for the new 2026 land price table. The adjustment range should be from 0.2 to 3 times per coefficient K adjustment to stabilize market prices without causing inflation.

Specifically, agricultural land prices in the land price table should be 30% of the residential land price on the same plot. Currently, provinces like Nghe An set agricultural land prices at 20% of residential land prices on the same plot, significantly easing the financial burden on residents when converting agricultural land to residential use.

IEEr suggests that the K coefficient method only requires consultation with advisory agencies on the suitability of the K coefficient for each land area. In the long term, the K coefficient will be applied to individual plots and projects once land data in Ho Chi Minh City is cleaned up.

“If the spirit of the land price table construction directive from the Ministry of Finance is followed, this process will be quick and convenient when applying the K coefficient for price adjustments within the year. This means the number of adjustments is not limited in resolving land use fees,” said Dr. Pham Viet Thuan, Director of IEEr.

According to Dr. Thuan, this approach is highly convenient for the government to calculate land prices based on coefficients, rather than relying on consultants for appraisals, which can take decades and often yield inaccurate results. Many inaccurate appraisals have led to criminal charges, causing significant repercussions.

Citing data on land price tables from Binh Duong, Ba Ria – Vung Tau, and Ho Chi Minh City before consolidation, Dr. Thuan argues that the land price table is very stable. This serves as the base price table to be multiplied by the K coefficient for the first land price table applicable to all of Ho Chi Minh City from January 1, 2026. This approach aligns with practical realities and sets a foundation for surrounding areas to develop. Building a land price table based on current market prices in Ho Chi Minh City and multiplying it by coefficient K is unreasonable in terms of the coefficient.

Meanwhile, the land price table under Decision 79/2024, effective from October 31, 2024, in Ho Chi Minh City, is excessively high. The survey, evaluation, and appraisal process during its construction was unrealistic, leading to numerous issues and causing difficulties for the majority of workers and real estate businesses. It has also complicated state management in resolving land use fee procedures due to its detachment from reality.

The current method, which takes market prices and multiplies them by coefficient K, results in land prices far exceeding the affordability of residents. With an average national income of approximately 8.2 million VND per month, the high prices of land and social housing create a paradox. A two-bedroom apartment priced at 1.2 billion VND requires workers to save for decades to afford, highlighting the disconnect of Decision 79/2024 from reality.

Therefore, IEEr believes that the new land price table should not follow the approach of Decision 79/2024 but should adhere to the Politburo’s directives and the Ministry of Finance’s guidance on applying the K coefficient in land price table construction.

Data Collection Completed

Meanwhile, Mr. Dao Quang Duong, Head of the Land Economy Department at the Department of Agriculture and Environment, stated that Ho Chi Minh City is developing a land price table based on data collected by a consulting unit from over 7,500 roads. This initial land price table will serve as the basis for application in 12 cases as stipulated by the 2024 Land Law.

Once the draft is ready, it will be released for public consultation before being approved by the competent authority. Surveys and data collection indicate that the land prices being developed are not significantly different from those in Decision 79 of the Ho Chi Minh City People’s Committee currently in effect.

However, according to Mr. Dao Quang Duong, if the new land price table effective from January 1, 2026, is equal to the current table but multiplied by coefficient K, prices will rise significantly. The new land price table will apply to 12 specific cases, unlike the limited cases previously, and will thus have a broad impact on various economic sectors.

First, it will directly affect individuals and households paying land use fees. Second, organizations and individuals leasing land will face substantial increases in annual land rent payments, impacting business operations and the overall national economy.

Third, businesses paying land use fees will encounter significant difficulties. Those directly engaged in agricultural production on agricultural land will also be severely affected due to the high coefficient multiplication.

“In principle, when creating a land price table, the lowest price is taken to ensure no one is disadvantaged. However, when establishing the land price adjustment coefficient, the lowest price cannot be used,” said Mr. Duong.

Consequently, residents whose land is expropriated may not agree with the compensation, leading to complaints and disputes. Under the two-tier local government model, roads will no longer be divided by district boundaries but by ward and commune boundaries, making the development of land price adjustment coefficients particularly challenging.