What benefits do businesses and the people receive?

The amended Land Law, passed on January 18th, abolished the land price framework and stipulated a land price table in Article 159. Accordingly, the land price table will be developed annually, and the first land price table will be published and applied from January 1st, 2026, and adjusted from January 1st of the following year.

Regarding this new development, experts generally agree that abolishing the land price framework is necessary to eliminate the administrative-imposed land management mechanism and shift towards establishing land price tables that closely reflect market values.

This will help curb land speculation. Because when land prices are closer to market value, higher property taxes and transfer fees will reduce the attractiveness of investing in land. People who need to buy houses or land for living will have a better chance of buying at the "right price," avoiding situations where speculators hoard land and inflate prices…

Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), believes that abolishing the land price framework is reasonable because the land prices stipulated in the State's land price list are always 30-50% lower than market land prices.

With the amended Land Law passed, businesses and citizens will benefit.

Specifically, in Ho Chi Minh City, the land price list for the period 2020-2024 remains essentially unchanged compared to the period 2016-2019. The highest urban land prices are 162 million VND/m2, such as on Nguyen Hue Street, and 110 million VND/m2 on Le Duan Street.

In 2014, when 3,000 square meters of land on Le Duan Street were auctioned, the starting price was 180 million VND/square meter, and after 16 rounds of bidding, some bidders offered more than 400 million VND/square meter.

" These are the representative land prices based on market transactions ," Mr. Chau said.

Sharing the same view, Troy Griffiths, Deputy Managing Director of Savills Vietnam, also believes that abolishing the land price framework will support the development of the real estate market. In addition, all land areas subject to clearance and compensation will be valued at market prices, creating more confidence for investors and the public.

" Overall, market value, especially in land compensation, is a sensitive issue. If the State cannot acquire land for infrastructure projects, it will affect the overall pace of economic development ," said Troy Griffiths.

According to Troy Griffiths, people who lose land due to socio-economic development projects could receive fairer compensation thanks to higher land tax revenues if the transaction price is determined closer to market value.

Mr. Vu The Diep, Permanent Vice Chairman of the Hanoi Real Estate Club, also believes that abolishing the land price framework will help businesses accelerate land clearance progress, eliminate weak businesses, and benefit people whose land is confiscated.

According to the old law, the low land price framework caused significant disadvantages for people when land was expropriated and cleared. This was also one of the reasons for many disagreements and complaints. Therefore, removing the land price framework in this revised draft Land Law can be considered a breakthrough.

Mr. Diep further analyzed that abolishing the land price framework would positively affect the State, the people, and businesses.

Specifically, when people's land is confiscated, they will be able to receive higher and fairer compensation, thereby ensuring the rights of those whose land is seized.

For the government, abolishing land price frameworks will drive up compensation and land clearance costs, bringing assets back to their true value and making the market more transparent.

Therefore, the State can avoid the situation of two prices, meaning landowners declare a lower land price to benefit from a lower tax rate than the actual value. This can help the State avoid budget losses.

" However, even if the land price framework is abolished, when land is reclaimed for a specific project, not all 100% of the people may agree with the compensation plan offered by the enterprise or the state. Therefore, more detailed regulations on this issue are needed ," Mr. Diep stated.

For businesses, abolishing the land price framework will help accelerate land clearance progress and eliminate underperforming businesses. However, businesses may have to bear higher investment costs.

Ngoc Vy

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