Vietnam Proposes 4 Principles for State-Determined Land Pricing

Vietnam's government has proposed introducing four fundamental principles for determining land prices decided by the state under the revised Land Law. This aims to enhance transparency and fairness in the land pricing process and harmonize interests among the state, land users, and investors. According to the draft law, state-determined land prices must adhere to four principles: objectivity, adherence to proper procedures, reliance on relevant data, and harmonization of interests among the state, land users, and investors. This approach marks a departure from market-based pricing methods stipulated in the current 2024 Land Law. The new draft law outlines the basis for price determination, including the land's purpose, usage duration, input information, factors affecting prices, and legal regulations at the time of valuation. Detailed regulations on specific pricing methods, the Land Price Appraisal Council, and the rights and obligations of land price appraisal consultants are expected to be guided by future government decrees. The land price table, developed for each region and location, along with an adjustment coefficient (K-factor) reflecting market price deviations, will be used to calculate land use taxes, compensation for state land acquisition, and auction starting prices for land use rights. Provincial People's Committees will develop and submit land price tables and adjustment coefficients to their respective People's Councils for decision. These may be amended in response to changes in administrative boundaries or land management requirements. During consultations, challenges in current land price determination, such as data dispersion, slow updates, and failure to reflect actual transaction prices, were highlighted. Calls were made for enhanced integration between land databases and those of tax, notary, and banking sectors. Some also proposed abandoning the K-factor in favor of a single pricing mechanism. The government has indicated that detailed regulations regarding land price tables and adjustment coefficients will be stipulated by the Prime Minister. Source: VnExpress