Vietnam Proposes Overhauling Land Valuation Methods

The Ministry of Agriculture and Rural Development has proposed abolishing the "specific land price" calculation method in a draft amendment to the Land Law, opting instead for a new approach using a "land price table" and "adjustment coefficients." This proposal aims to overcome several limitations in the current 2024 Land Law and promote the utilization of land resources for socio-economic development. The draft amendment is open for public consultation until August 10. Under the current law, specific land prices are applied in seven cases, including valuing land use rights upon equitization of state-owned enterprises, land use fees for state land allocation without auction or investor selection, one-time land lease payments, and compensation amounts for land acquisition. These specific prices are determined by professional appraisers using one of four methods: comparison, income, residual, or price coefficient. They are then reviewed by an appraisal council before being decided by the provincial/municipal People's Committee. In contrast, the land price table serves as a basis for various purposes such as land transfer, lease, land use change, taxes, fees, administrative violation penalties, and land acquisition compensation. The land price table is compiled based on land type, region, and location, decided by the provincial/municipal People's Council, and will take effect from January 1, 2026. Adjustment coefficients indicate the percentage increase or decrease in land prices for corresponding regions and locations in the land price table. The Ministry of Agriculture and Rural Development points out that calculating specific prices based on market principles faces many difficulties that affect management and compensation for resettlement. The coexistence of the land price table and specific land prices under the current system creates "dual land prices," leading to issues such as data scarcity and price manipulation due to speculation. The ministry emphasizes that land prices decided by the government will be based on complete, scientific, and transparent data, reasonably reflecting market realities. Furthermore, this pricing mechanism will be linked with data from land, tax, notary, and banking systems to prevent price manipulation and the formation of multiple pricing structures. Source: VnExpress