How does the new land price list in Ho Chi Minh City affect real estate businesses?

Laws change

From August 1, 2024, the Land Law, the Real Estate Business Law, and the Housing Law will take effect. In addition, in Ho Chi Minh City, the Department of Natural Resources and Environment (DONRE) of Ho Chi Minh City also proposed to issue a Draft on adjusting land price lists throughout the city.

Besides a series of opinions hoping that the law will help the market become transparent, move towards fairness in land price calculation, and resolve the problems of people whose land has been recovered, there are still many concerns that the increase in land price calculation is not the main factor affecting real estate businesses and affecting the people and home buyers.

The Land Law comes into effect, making the market transparent and land prices also fluctuate.

Specifically, Article 159 of the 2024 Land Law stipulates that the land price framework will be abolished and the land price list will have to be updated annually instead of every 5 years as before. Accordingly, the Government has decentralized and increased the responsibility of the provincial People's Committee when stipulating that the determination of the land price list will be carried out by the provincial People's Committee; at the same time, the "deduction" method will be eliminated, and instead, land prices will be determined according to 4 methods: comparison, income, surplus and land price adjustment coefficient.

Sharing with reporters about current land pricing methods, Mr. Le Dinh Lang, Director of Song Long Real Estate Investment, Construction and Development Company Limited, commented: "Current laws are very complete and close to market reality, in which the Land Law has regulations on land valuation with new methods to help land valuation be close to reality, ensuring transparency and sustainability."

"However, with the new calculation method, the cost of developing a business project will more or less increase. When market prices increase, investors will be forced to sell the project at a high price and cannot lower it," Mr. Lang shared.

Rising land costs over the years have driven up housing prices.

Meanwhile, Mr. Dao Huy (investor) also commented that the real estate market is increasingly fluctuating in prices. Although this is a characteristic of the real estate market in Vietnam, which is to accumulate and increase prices over time. However, when new laws are applied, especially in Ho Chi Minh City, if a new land price list is issued, it will certainly face many concerns from businesses and those who are in need of owning long-term housing.

Land use fees are always calculated fairly for businesses.

Regarding the Draft of the land price list in Ho Chi Minh City, many opinions say that the new land price list will have a big impact on real estate businesses. When land prices are high, meaning high input, high output, will directly impact buyers. From there, the selling price of products will be very high.

Mr. Nguyen Toan Thang, Director of the Department of Natural Resources and Environment of Ho Chi Minh City informed that: "The adjustment of the Land Price List does not affect real estate businesses because land use fees for real estate projects are determined by the surplus method.

Therefore, the result of determining the value of land use rights according to the surplus method, whether higher or lower than the land price in the Land Price List, does not have to be adjusted according to the land price in the Land Price List as prescribed in Clause 8, Article 158 of the 2024 Land Law (using the result determined according to the surplus method).

Mr. Nguyen Toan Thang, Director of the Department of Natural Resources and Environment of Ho Chi Minh City, informed the press about Ho Chi Minh City's issuance of a new land price list and information surrounding the subjects related to the issuance of the price list.

A representative of the Ho Chi Minh City Department of Natural Resources and Environment said that all commercial housing real estate projects are subject to the market price list at the time of calculation. The Ho Chi Minh City Department of Natural Resources and Environment will invite valuation units to appraise the amount of money that businesses must pay at the time of paying land use fees. Therefore, the issuance of the new land price list does not affect real estate businesses.

Also according to information from the Department of Natural Resources and Environment of Ho Chi Minh City, the agricultural land price in the adjusted land price list has increased compared to before, making the land rent gap more harmonious than in reality, which leads to more transparent, public, fair and reasonable deductions for real estate businesses when fulfilling financial obligations. On the other hand, real estate prices operate according to the law of supply and demand, so the selling price will be decided by the market.

According to new regulations after the 2024 Land Law takes effect, land prices for commercial housing projects will still be calculated using the surplus method, which has been the main method applied since 2014 to calculate land use fees for real estate projects, with an application rate of up to 90%.

Choosing these factors ensures that land prices will be priced close to the market in a stable manner, avoiding sudden increases in land prices or "virtual fever" that pose a risk to the safety of the real estate market in general and the capital market in particular.

A project in Binh Chanh district, Ho Chi Minh City is facing problems with land use fees, causing delays in issuing land use certificates to people.

In addition, the agricultural land price in the adjusted land price list is higher than before, making the land rent gap more harmonious than in reality, which leads to more transparent, public, fair and reasonable deductions for real estate businesses when fulfilling financial obligations.

Sharing with Nguoi Dua Tin about the current land price calculation method, Mr. Ngo Quang Phuc, General Director of Phu Dong Real Estate Joint Stock Company, said that "The new land price calculation method will more or less affect the increase in real estate prices in the coming time, when land costs, construction costs, project development costs... continuously increase, housing prices also fluctuate.

The best solution to limit the increase in real estate prices is for the State to support businesses in shortening legal procedures for projects, increasing the supply of affordable housing, social housing... to increase supply, thereby stabilizing prices.

Source: https://www.nguoiduatin.vn/bang-gia-dat-moi-tai-tphcm-anh-huong-gi-den-doanh-nghiep-bat-dong-san-204240830103413663.htm