The newly adjusted land price list of Ho Chi Minh City has not yet affected projects immediately, but in the coming time, it will impact the market, because it increases the cost of creating land funds, the cost of paying land use fees, etc. for businesses.
Ho Chi Minh City: Enterprises worry about increased costs of land fund creation and land use fees
The newly adjusted land price list of Ho Chi Minh City has not yet affected projects immediately, but in the coming time, it will impact the market, because it increases the cost of creating land funds, the cost of paying land use fees, etc. for businesses.
Conversion Profile Increases Strongly
Ho Chi Minh City officially applies the new land price list from October 31, 2024, according to Decision No. 79/2024/QD-UBND of the Ho Chi Minh City People's Committee.
Previously, knowing that Ho Chi Minh City announced a land price list with an increase of 4 - 38 times (not including the K coefficient) compared to the old land price list, many people who wanted to change land use purposes and make "red books" went to the branches of the land registration office to do related procedures before the new land price list was applied.
At the end of October, when a reporter from Dau Tu Newspaper was present at the Go Vap District Land Registration Office, Mr. Tran Van Trung, an employee of a real estate consulting service company, was waiting to submit 6 sets of documents. Mr. Trung shared that in October (before the new land price list was applied), he had completed and submitted 15 sets of documents for customers in Go Vap, District 12 and Hoc Mon. These documents were mainly for changing the purpose of use, issuing red books and even transferring land.
According to experts, this new land price list will have a strong impact on individuals who need to apply for recognition of residential land use rights, change land use purposes, or separate residential land plots...
Mr. Vo Hong Thang, Deputy General Director of DKRA Group said: “The new land price list in the short term will have a mixed psychological impact, both positive and negative. People who want to convert from other land to residential land will have to pay many times higher taxes (at least 10 times), especially in the outlying districts, because agricultural land is mainly concentrated in this area, and the amount of tax to be paid is even higher than the price of previously purchased agricultural land.”
Businesses are also worried.
Talking to reporters of Dau Tu Newspaper, most real estate businesses said that, in the short term, the new land price list does not directly affect real estate projects, but in the coming time, it will indirectly increase the cost of creating land funds and the cost of paying land use fees.
Mr. Ha Van Thien, Deputy General Director of Tran Anh Group, shared that the issue that investors and businesses are very concerned about is whether the authorities will allow tax debt when converting land use purposes. Previously, tax debt was not allowed when converting, but now, in cases where there are no conditions to fulfill financial obligations on land, the Land Law allows land users to record land use fees in debt, and only when transferring land use rights and generating income must they pay.
“Regarding prices, real estate prices will certainly increase in the near future. Because according to the market mechanism, when input costs increase, there is no reason for output prices to decrease or remain the same,” Mr. Thien emphasized.
Sharing the same view, Mr. Tran Quang Trung, Business Development Director of OneHousing, said that many people in Ho Chi Minh City are still waiting for apartment prices to decrease, but this is not feasible. The reason is that all input factors of project development enterprises such as land tax costs according to the new price list, construction costs, product design investment costs... are all increased very high.
According to Mr. Trung, in the context of increasingly scarce land funds, to own a beautiful location, especially in the central area, businesses have to spend a huge amount of money. When land prices are high, investors make a popular product, then they will certainly lose money. With beautiful locations, project developers will also have to build products worthy of that location, so there will not be cheap prices.
From a market perspective, Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association, commented that the adjusted land price list has not yet had an immediate impact on the real estate market, because projects are mainly priced using the surplus method. However, the new land price will impact the market in "phase 2", when real estate enterprises receive land use rights transfers to implement projects and at this time, people have the mentality of wanting to sell land at a higher price than before, leading to pressure on house prices to increase.
Therefore, the State needs to have effective measures to control the activities of speculators and land brokers, etc., to avoid taking advantage of the new land price list to "inflate prices", disrupting the market for the purpose of illegal profiteering.
Source: https://baodautu.vn/batdongsan/tphcm-doanh-nghiep-lo-tang-chi-phi-tao-lap-quy-dat-dong-tien-su-dung-dat-d229242.html
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