Brian Jeffrey
New Land Price List in Hanoi: Key Changes and Impacts
Hanoi has announced its latest land price list, effective from December 20, 2024, through December 31, 2025. Authorities assert that aligning these prices closer to market rates will promote fairness and eliminate the so-called ‘dual pricing’ issue.
‘Dual pricing’ refers to the discrepancy between the official land prices set by the government and the higher prices reflected in actual transactions. Typically, these market rates surpass the official figures significantly.
With this adjustment, a notable rise in land use fees is anticipated.
Pham B from My Duc district highlighted to VietNamNet that he had just finalized his land use payments at the end of 2024 to change part of his property from residential to garden. However, due to the new price list coming into effect, he faced an increase in fees from VND350 million to VND800 million.
Similarly, Nguyen T from Long Bien district expressed concern over her family’s 1,000 square meters of garden land, which would now cost VND15 billion to convert into residential land—far beyond their financial means. They are still undecided on the conversion.
The rise in land values and fees is also prompting investors with agricultural land in the suburbs to reevaluate their strategies. For instance, Cao N from Ha Dong regrets not earlier transforming his agricultural plots in Chuong My and Thach That districts into residential properties. The new prices have surged to 2-4 times the old rates, significantly increasing conversion costs.
At a recent seminar, Prof. Dang Hung Vo, the former Deputy Minister of Natural Resources and Environment, stated that land price structures should accurately depict real market conditions. He argued that the state needs to establish guidelines on when to apply full market prices versus reduced rates tailored to different scenarios for optimal investment and social welfare.
Le Van Binh, Deputy Director of the Land Department, clarified that real estate developments are not bound by land price frameworks but rather specific calculations for land use fees. The frameworks mainly apply to individual landowners or annual leaseholders. Importantly, Binh noted that the land conversion process has been simplified compared to the past when lower prices hindered clarity and efficiency.
He acknowledged that residents may reconsider land conversions due to the increased costs, often opting for smaller areas than initially planned. Binh emphasized the importance of equality in the land market, stating that lower prices could benefit specific groups while jeopardizing state revenues and those who surrender land for public projects.
With the new pricing aligned more closely with market values, he believes it will encourage people to offer their land for development in anticipation of fairer compensation, ultimately aiding in project execution and cost reduction.
