What benefits do businesses and people get?

The revised Land Law, which was passed on January 18, has removed the land price framework and stipulated the land price table in Article 159. Accordingly, the land price table is built annually and the first land price table is announced, applied from January 1, 2026 and adjusted from January 1 of the following year.

Assessing this new point, experts all said that removing the land price framework is necessary to eliminate the administrative land management mechanism and switch to building a land price list close to market value.

This will help limit land speculation. Because when the land price frame is close to the market, real estate taxes and transfer fees will be higher, reducing the attractiveness of investing in land. People who want to buy houses and land to live will have a better chance of buying at the "right price", avoiding the situation of speculators holding land and inflating prices...

Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), said that removing the land price frame is reasonable because the land price specified in the State's land price list is always 30-50% lower than the market land price.

The revised Land Law was passed, businesses and people benefit.

Specifically, in Ho Chi Minh City, the land price list for the period 2020 - 2024 is basically the same as the period 2016 - 2019. The highest urban land price is 162 million VND/m2 on Nguyen Hue Street, 110 million VND/m2 on Le Duan Street.

In 2014, when auctioning 3,000 square meters of land on Le Duan Street, the starting price was 180 million VND/square meter. After 16 rounds of auction, there was a unit that paid more than 400 million VND/square meter.

" This is the representative land price due to market transactions ," said Mr. Chau.

Sharing the same view, Mr. Troy Griffiths, Deputy CEO of Savills Vietnam, also said that the abolition of the land price framework will support the development of the real estate market. In addition, all cleared and compensated land will be priced in accordance with market prices, creating more confidence for investors and residents.

" In general, market value, especially in land compensation, is a sensitive issue. If the State cannot reclaim land for infrastructure projects, it will affect the overall economic growth rate ," said Mr. Troy Griffiths.

According to Mr. Troy Griffiths, people who lose land under socio-economic development planning projects can be compensated more fairly thanks to higher land tax revenue, if the transaction price is determined closer to the market price.

Mr. Vu The Diep - Permanent Vice President of Hanoi Real Estate Club also said that removing the land price frame will help businesses accelerate site clearance progress, eliminate weak businesses and benefit people when their land is recovered.

According to the old law, due to the low land price framework, people were at a disadvantage when it came to land acquisition and site clearance. This was also one of the reasons for many disagreements and complaints. Therefore, the removal of the land price framework in the draft revised Land Law this time can be considered a breakthrough.

Mr. Diep further analyzed that removing the land price framework will affect the State, people and businesses in a positive way.

Specifically, when people have their land recovered, they will be able to receive compensation at a higher and fairer price, thereby ensuring the rights of people whose land is recovered.

For the State, removing the land price framework will push up compensation and site clearance costs, bringing assets back to their true value, and making the market more transparent.

From there, the State can avoid the situation of two prices, that is, landowners declare low land prices to enjoy lower tax rates than the actual. This can help the State avoid budget losses.

“ However, even if the land price framework is removed, when reclaiming land for a specific project, not 100% of the people may agree with the compensation plan of the enterprise or the state. Therefore, there needs to be more detailed regulations on this issue ,” Mr. Diep commented.

For businesses, removing the land price framework will help speed up site clearance and eliminate weak businesses. However, businesses may have to bear higher investment costs.

Ngoc Vy

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