The people are worried and uneasy.
Starting August 1st, Ho Chi Minh City is expected to issue a new land price list, adjusting prices upwards by 5 times to 20-30 times compared to the current list, depending on the area. The most significant increases are expected in suburban districts such as Can Gio, Cu Chi, Hoc Mon, and Nha Be.
Expected land price list for some streets in District 1.
Ms. Nguyen Thi Huyen (Binh Thanh District) was bewildered by the news that Ho Chi Minh City has a draft of a new land price list to be issued and applied at the beginning of August. She only learned about it a few days ago through friends. Ms. Huyen's family jointly purchased a plot of land in Cu Chi with a friend; the land includes a small amount of residential land, and the rest is land for perennial crops. Her family plans to convert more of the land to residential land and then separate the land title.
With the news of the unexpected sharp increase in land prices in Cu Chi, Ms. Huyen is worried because she hasn't made any financial preparations. Based on the new land price, she could lose several hundred million dong to convert her land to residential status.
Like Ms. Huyen, Ms. Tran Thi Anh (Hoc Mon district) is worried about the new land price list, which has increased many times compared to the current price. Her family lives on land inherited from their ancestors, and the land use purpose has not been changed or subdivided. For a long time, she and her husband have lived with her parents, and due to insufficient funds, they have not been able to complete the procedures for subdividing the land, obtaining a land title certificate, or changing the land use purpose. If the city suddenly applies the new land price, Ms. Anh believes her family will have difficulty managing their finances and subdividing the land.
In addition, Ms. Anh also expressed a wish to postpone the implementation of the new land price list for a while longer so that people can familiarize themselves with it and make appropriate calculations.
Ms. Anh and Ms. Huyen are among those directly affected by the new land price list. According to the Ho Chi Minh City Department of Natural Resources and Environment, the new land price list will impact 12 groups of people. The group least affected is those who are allocated resettlement land; the adjusted land price list will ensure that the specific land prices are consistent with market prices.
The remaining 11 groups will be directly affected. Of these, the two most affected groups are households and individuals who have been granted land use rights and who have changed the purpose of land use.
Many streets in the central area of Ho Chi Minh City have seen land prices increase by approximately five times compared to the current price list (Illustrative image: Hai Long).
However, the Department stated that land use cases that were stable before October 15, 1993, are exempt from land use fees. If the land area exceeds the permitted limit, fees will be collected according to the 2005 land price list.
For other land use cases, the appropriate collection rate will be determined based on the origin and time points of land use. In the draft decree on land use fees and land lease fees to be issued by the Government , the collection rate will be based on time points ranging from 10% to 50% of the projected adjusted land price list. In addition, land users belonging to policy beneficiary families, war veterans, and poor households will be exempted from or receive reductions in land use fees according to Government regulations.
Will the new land price list cause housing prices to rise?
Mr. Vo Hong Thang - Director of Consulting Services and Project Development at DKRA Group - said that the draft land price list is 5-30 times higher than the current land price framework, but the current price is close to 70% of the market price. Many people mistakenly believe that the land price list represents the tax people have to pay when converting land use to residential land, but that is incorrect.
The tax will have adjustment factors and a tax calculation method, so we need to wait for further decrees and circulars from state management agencies before we can accurately calculate the costs that people have to pay for changing the land use purpose, Mr. Thang said.
Overall, Mr. Thang assessed that the new land price list affects two groups. For the people, the new land price list impacts the land use conversion tax, but the increase is only 0.5 to 1 time, depending on the area.
For businesses, the new land price list increases land clearance and compensation costs because they are increasingly closer to market prices. Increased land use fees and associated taxes and charges will also contribute to the rising selling price of real estate, which is expected to increase in the future.
However, from a positive perspective, he stated that the new land price list reflects the effectiveness of the upcoming 2024 Land Law, helping to shorten the legal implementation time for projects and resolve legal obstacles. Especially in the area of land clearance and compensation, when prices are closer to market rates, it will be easier for businesses to reach agreements with residents.
Secondly, the issue of land use fees has been resolved. Even if land use fees increase, it will shorten the legal implementation time for projects, and businesses will save on financial costs.
Mr. Thang expects that the three upcoming laws will streamline the legal process for projects, shorten project licensing times, and help businesses save on financial and administrative costs. Savings in these two types of costs will offset land use fees, thus mitigating real estate price increases.
He also assessed the application of the new land price list from August 1st as an effort by state management agencies to quickly bring real estate-related laws into practice. This shortened process accelerates the recovery of the market. Of course, when state agencies issue draft circulars and guiding decrees, they will receive mixed reactions from the market.
He believes that government agencies will make appropriate adjustments to facilitate practical application. Multi-faceted feedback is necessary, demonstrating the interest of market participants.
Experts believe that real estate prices will rise when land price lists increase (Illustrative image: Trinh Nguyen).
At a recent press conference, the head of the Department of Natural Resources and Environment explained the immediate application of the new land price list from August 1st.
Mr. Nguyen Toan Thang, Director of the Department of Natural Resources and Environment of Ho Chi Minh City, said that the Land Law of 2024, which is about to be applied, stipulates that the land price list issued by the provincial People's Committee under the old law will continue to be applied until the end of 2025. If necessary, the provincial People's Committee will decide to adjust the land price list to suit the actual situation in the locality.
Based on this regulation, the Ho Chi Minh City People's Committee considers the 2020 land price list to be no longer appropriate. Furthermore, it is necessary to issue resettlement land prices in accordance with the new land law.
Therefore, in early July, the Ho Chi Minh City People's Committee assigned the Department of Natural Resources and Environment to take the lead and coordinate with other departments, agencies, and localities to draft a revised land price list. The new land price list will no longer have adjustment coefficients but will only have a single price range and will include resettlement land prices in accordance with the new land law.
When asked about whether increasing land price tables would lead to higher real estate prices, Mr. Nguyen Toan Thang stated that this information was incorrect. According to Mr. Thang, the basis for constructing land price tables is market data and land price data, which has been collected over the years from the Ho Chi Minh City Tax Department and the Ho Chi Minh City Land Registration Office.
This draft price list is an updated version of actual transaction data, and the Ho Chi Minh City Department of Natural Resources and Environment has made adjustments to it. It will not increase real estate prices; on the contrary, the prices accurately reflect transaction prices in the city. Furthermore, the Department stated that the land prices it submitted to the City People's Committee are approximately 70% of the current market price.
A representative from the Land Economics Department (Ho Chi Minh City Department of Natural Resources and Environment) added that the new land price list does not affect the input costs of projects and therefore does not increase real estate prices. Furthermore, real estate prices operate according to the law of supply and demand, and are not affected by this new land price list.
For cases where people submitted land registration documents before August 1st of this year, a representative from the Department of Natural Resources and Environment stated that the agency will apply the land price list in effect at the time of receiving complete documentation.
Source: https://dantri.com.vn/bat-dong-san/ban-khoan-voi-bang-gia-dat-moi-tai-tphcm-20240801062107160.htm
