Reduce financial pressure on people
Dr. Pham Viet Thuan, Director of the Ho Chi Minh City Institute of Natural Resources and Environment, said that applying the price list according to Decision 79/2024 will have a negative impact on the general market in the city. That is, reducing budget revenue from land use conversion, limiting the development of the real estate market, and deeply reducing the construction materials market due to the limitation of new construction from the people. Recently, the Ho Chi Minh City Institute of Natural Resources and Environment sent a document to the Ho Chi Minh City People's Committee proposing to adjust the price of agricultural land with residential land planning to 65%-70% in the land price list according to Decision 79/2024 previously applied in the Ho Chi Minh City area.
According to Dr. Pham Viet Thuan, the scope of adjustment will apply to agricultural land plots mixed in residential areas with residential land planning, or residential land plots with agricultural land that has not been converted to residential land when there is a need to convert to residential land according to the guidance of the 2024 Land Law. In addition, agricultural land without residential land planning will not be adjusted to increase according to the proposal, in order to create conditions for projects and industrial parks and clusters to develop in the long term. "If the proposal is approved, people will only have to pay 2.5-3 times more tax, equivalent to 250%-300% compared to when applying the land price list according to Decision 02/2020 before. Meanwhile, if not adjusted, the amount of land use fees that people have to pay will increase on average from 5-25 times, equivalent to 500%-2,500%, an increase that is too large," said Dr. Pham Viet Thuan.
Take the case of Mr. NK (Tan Thanh Dong commune, Cu Chi district) as an example. When he heard about the new land price list, on October 30, 2024, he submitted an application to convert nearly 960m2 of agricultural land to residential land. Applying the new land price list, he had to pay more than 4.3 billion VND. Meanwhile, with the calculation method proposed by the Ho Chi Minh City Institute of Natural Resources and Environment Economics, Mr. K. will have less financial burden. Specifically, the land price in Mr. K.'s area is 4.3 million VND/ m2 , if the agricultural land price is increased to 70% of the residential land price, then 4.3 x 70% = 3 million VND/ m2 . According to the calculation method prescribed in Decree 103/2024 on land use fees and land rents, the land use fee when converting land use purpose to residential land is 4.3 million VND - 3 million VND = 1.3 million VND/ m2 . Thus, with 100m2 , when changing the land use purpose, he only has to pay 1.3 billion VND, a reduction of more than 3 billion VND compared to the current calculation.
Consider carefully
However, some real estate experts believe that it is necessary to carefully consider raising agricultural land prices as proposed because it will lead to an increase in housing prices, affecting the development of real estate businesses. In addition, there may be a situation of land accumulation waiting for conversion, causing the source of production land to slow down, deviating the development of urban agriculture.
Mr. Vo Van Thuong, Chairman of Ba Ria Real Estate Club, said that increasing agricultural land prices by 65%-70% of residential land prices could lead to many consequences. Agricultural land cannot be considered close to the value of residential land, which can easily lead to speculation in agricultural land waiting for prices to increase, causing the real estate market to have unfavorable fluctuations for projects that already have residential land. Meanwhile, Mr. Le Viet Lien, General Director of Ba Ria - Vung Tau Housing Development Joint Stock Company, commented that when implementing a housing project, businesses must change the land use purpose from agricultural land to residential land. When land prices increase, businesses must accumulate more money to be able to change the land use purpose. Meanwhile, at this time, real estate businesses are having a very difficult time managing their finances.
According to Lawyer Nguyen Canh, Director of Nguyen Canh Law Company Limited (Vung Tau Ward, Ho Chi Minh City), adjusting the price of agricultural land to increase is necessary but must comply with the land valuation process according to the 2024 Land Law, with consultation with specialized departments, branches and independent valuation consulting organizations. In particular, it is necessary to thoroughly understand the principles of land valuation methods according to market principles as prescribed by the Land Law. Determining land prices must be based on collecting information from the transfer market, land income, investment costs, neighboring land prices... cannot take a fixed ratio from residential land prices.
Source: https://www.sggp.org.vn/de-xuat-tang-gia-dat-nong-nghiep-len-65-70-nhieu-ban-khoan-post803655.html
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