Businesses are concerned about increased costs for land acquisition and land use fees.

The newly adjusted land price list of Ho Chi Minh City has not immediately affected projects, but it will impact the market in the future, as it increases the costs of land acquisition and land use fees for businesses.

Ho Chi Minh City: Businesses worry about increased costs for land acquisition and land use fees.

The newly adjusted land price list of Ho Chi Minh City has not immediately affected projects, but it will impact the market in the future, as it increases the costs of land acquisition and land use fees for businesses.

Conversion applications have increased sharply.

Ho Chi Minh City officially implemented the new land price list from October 31, 2024, according to Decision No. 79/2024/QD-UBND of the People's Committee of Ho Chi Minh City.

Previously, upon learning that Ho Chi Minh City had announced land price lists with increases ranging from 4 to 38 times (before applying the K factor) compared to the old land price list, many people needing to change land use purposes or obtain land ownership certificates ("red books") went to land registration office branches to complete the necessary procedures before the new land price list was applied.

In late October, when a reporter from the Investment Newspaper visited the Go Vap District Land Registration Office branch, Mr. Tran Van Trung, an employee of a real estate consulting company, was waiting to submit six sets of documents. Mr. Trung shared that in October (before the new land price list came into effect), he had completed and submitted 15 sets of documents for clients in Go Vap, District 12, and Hoc Mon. These documents mainly involved changing land use purposes, issuing land ownership certificates, and transferring land ownership.

According to experts, this new land price list will have a significant impact on individuals who need to apply for recognition of land use rights, change of land use purpose, or subdivision of residential land...

Mr. Vo Hong Thang, Deputy General Director of DKRA Group, said: “The new land price list will have a mixed impact on people's psychology in the short term, with both positive and negative effects. People who need to convert other types of land to residential land will have to pay much higher taxes (at least 10 times higher), especially in suburban districts, because agricultural land is mainly concentrated in these areas. In fact, the amount of tax payable may even be higher than the price of the agricultural land they purchased previously.”

Businesses also have more worries.

In discussions with reporters from Investment Newspaper, most real estate businesses stated that, in the short term, the new land price list will not directly impact real estate projects, but in the future, it will indirectly increase the cost of land acquisition and land use fees.

Mr. Ha Van Thien, Deputy General Director of Tran Anh Group, shared that a major concern for investors and businesses is whether authorities allow tax deferral when converting land use purposes. Previously, tax deferral was not permitted during conversion, but now, in cases where land users are unable to fulfill their financial obligations regarding land, the Land Law allows them to defer payment of land use fees. Payment is only required when the land use rights are transferred and income is generated.

"Regarding prices, it is certain that real estate prices will increase in the near future. Because according to market mechanisms, when input costs increase, there is no reason for output prices to decrease or remain unchanged," Mr. Thien emphasized.

Sharing the same view, Mr. Tran Quang Trung, Business Development Director of OneHousing, believes that many people in Ho Chi Minh City are still waiting for apartment prices to fall, but this is not feasible. The reason is that all input factors for project developers, such as land tax costs according to the new price list, construction costs, product design investment costs, etc., have increased significantly.

According to Mr. Trung, in the context of increasingly scarce land, acquiring a prime location, especially in the city center, requires businesses to spend enormous sums of money. When land prices are high, if the developer creates a low-priced product, they will certainly incur losses. For prime locations, the project developer will also have to build products that match the location's quality, thus, there will be no cheap prices.

From a market perspective, Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association, believes that the adjusted land price list has not immediately impacted the real estate market, as land valuation for projects is mainly based on the surplus method. However, the new land prices will affect the market in "phase 2," when real estate businesses acquire land use rights to implement projects, and at this point, people will have the desire to sell land at higher prices than before, leading to upward pressure on housing prices.

Therefore, the State needs to take effective measures to control the activities of land speculators and brokers, preventing them from exploiting the new land price list to inflate prices and disrupt the market for illicit profit.

Source: https://baodautu.vn/batdongsan/tphcm-doanh-nghiep-lo-tang-chi-phi-tao-lap-quy-dat-dong-tien-su-dung-dat-d229242.html