Overview of Land Price Framework Adjustments in HCM City

The HCM City Department of Natural Resources and Environment has responded to inquiries regarding updates to the existing land price framework shaped by Decision 02/2020.

Officials clarified that there are no plans for a new official price framework in response to the recent land law revisions.

The initiation of the first land price framework is set for January 1, 2026, with annual adjustments to follow each subsequent year.

Currently, the department is implementing modifications to better align the existing land price framework with prevailing market conditions. These changes will take effect from August 1 to December 31, 2025.

The current framework faces three primary challenges: price limitations, issues with the land price adjustment coefficient (K), and a lack of updated information on resettlement land prices. The existing framework is utilized solely for six types of land use administrative procedures.

Contrarily, the 2024 Land Law framework will accommodate 12 types of administrative procedures, introducing seven new cases compared to the previous law.

The revised land prices will be informed by values approved by district committees and successful market transactions. These values are sourced from land registration and taxation agencies.

A consulting firm collaborated with local authorities to gather and analyze data, ensuring accurate comparisons and adjustments for each route’s pricing.

The revised framework will now include figures for 557 additional routes, bringing the total to 4,565 routes.

The prices for these new routes were established using comparative methods in accordance with the 2024 Land Law. Similarly, the pricing for 4,008 previously listed routes was also adjusted based on actual market transactions over the past two years.

It is worth noting that the new adjusted land prices are projected to be seven times greater than those currently listed. However, experts argue that this reflection only indicates a real increase of 2.5 times, as the K coefficient influences the price calculations in the existing framework.

In particular, agricultural land prices in Thu Duc City are set to rise by VND4.5-6.7 million per square meter, amounting to increases of 20.3-30.6 times compared to the current prices.

For other districts (7, 8, 12, Binh Tan, Binh Thanh, Go Vap, Tan Binh, and Tan Phu), agricultural land prices are expected to rise by VND5.5-9.9 million per square meter, which equates to a staggering 33-35 times. In the four suburban districts, agricultural land prices will see increases of VND380,000-3.6 million per square meter, or 3.6-15.7 times.

This recalibration of land prices is thought to significantly influence the real estate sector and could lead to rising housing prices.

The HCM City Department of Natural Resources and Environment stated that land use fees for real estate developments will be assessed using a surplus method, meaning that land assessments will remain unaffected even if they differ from the updated framework prices.

The anticipated rise in agricultural land prices is expected to close the gap in land rental prices, thereby creating a more transparent and equitable environment for real estate firms regarding land use fees.

These price adjustments may also impact production companies, as land constitutes a critical input cost for businesses.

The department noted that the adjustment affects two specific areas: the calculation of land use tax and land rents. Essentially, as land prices rise, so will the input costs for enterprises.

For land use tax calculations, per the Law on Non-agriculture Land Use Tax, the land price framework utilized for tax purposes will remain stable for five years, beginning January 1, 2012.

The present framework is currently in its third cycle, set to conclude in December 2027, with a new land price framework scheduled for implementation on January 1, 2028. As such, the recent adjustments will not affect non-agricultural land until the end of 2027.