Ho Chi Minh City finalizes the percentage of costs and profits as the basis for land valuation.

This is one of the important bases for determining land prices using the surplus method for real estate projects in Ho Chi Minh City.

Ho Chi Minh City finalizes the percentage of costs and profits as the basis for land valuation.

This is one of the important bases for determining land prices using the surplus method for real estate projects in Ho Chi Minh City.

Vice Chairman of Ho Chi Minh City People's Committee Bui Xuan Cuong has just signed and issued Decision No. 49/2025 stipulating the factors forming development revenue, factors estimating development costs in determining specific land prices according to the surplus method and factors affecting land prices when determining land prices in the City.

Investors profit equal to 15% of total construction investment cost

For the development cost estimation factors, the decision gives the percentages (%) to determine the business costs; interest expenses, investor profits taking into account the equity, business risks for project groups with the main land use purposes of the project types.

In particular, the City divides each specific segment into high-rise housing; townhouses, villas; land subdivision and sale; industrial parks, industrial clusters; offices, trade - services, hotels. Depending on each type of project, there will be different percentage regulations.

Interest costs, investor profits taking into account equity and business risks will be calculated as 15% multiplied by the total construction investment cost. Photo: Le Toan

Specifically, marketing, advertising and sales costs will be calculated at 2% of total revenue for all segments.

Management and operation costs will be applied at 15% of total rental revenue, applicable to high-rise housing projects; industrial park and industrial cluster investment projects; office, commercial and service investment projects. Particularly for townhouse and villa projects; subdivision and land sale projects, the rate will be applied at 5% of total rental revenue.

Notably, interest expenses, investor profits taking into account equity and business risks will be calculated by multiplying 15% by the total construction investment costs, business costs and land use rights value. This ratio applies to all of the above segments.

For hotel, medical, educational, sports investment projects or projects with specific characteristics, the organization implementing land price determination shall propose the percentage of marketing, advertising, sales costs; operational management costs; interest costs, investor profits taking into account equity, business risks and other costs in the Explanatory Report on land price plan development for the specific Land Price Appraisal Council to consider and decide.

Projects that are not sold in the first year

Regarding the factors that form the development revenue, Decision No. 49/2025 also stipulates the starting time of sales, sales time and sales ratio of each segment.

However, this rate only applies to cases where documents on investment policies or bidding documents for investment projects or decisions approving or accepting investment projects have not specified the time of sale; the time to start selling and trading products and services; decisions approving detailed construction planning have not specified the occupancy rate.

Accordingly, the sales start from the first year of the project and the sales percentage is allocated according to the construction floor area including the basement area.

Regarding sales time and sales rate, high-rise housing projects under 50,000 m2 of construction floor will have a sales time of 2 years with a rate of 40% in the first year and 60% in the second year. As for townhouse and villa projects with a scale of less than 100 units and projects dividing and selling land under 200 plots, the sales rate will be 100% within 1 year.

For large-scale projects with a longer sales period, from 4 to 5 years and not allowed to sell in the first year, including: High-rise housing projects with a scale of 150,000 m2 of construction floor or more; townhouse and villa projects with more than 1,000 products.

For office, commercial and service investment projects, the occupancy rate is 75% for office purposes, and 70% for commercial purposes.

For investment projects in hotels, healthcare, education, culture, sports or special projects, the organization implementing land price determination shall propose other factors to estimate development revenue in the Explanatory Report on land price plan development for the specific Land Price Appraisal Council to consider and decide.

The surplus method is implemented by taking the total estimated development revenue minus the total estimated development cost of the land plot or land area on the basis of the most efficient land use (land use coefficient, construction density, maximum number of floors of the building) according to the land use planning and detailed construction planning approved by the competent authority.

Total development revenue of a land plot or land area is determined based on estimates of transfer prices, land rental prices, premises rental prices, product and service business prices, fluctuations in transfer prices, land rental prices, premises rental prices, product and service business prices during the project implementation period and other revenue-forming factors including: sales time; time of commencement of sales, product and service business; sales rate; occupancy rate.

Business prices of products and services are applied in cases where transfer prices, land rental prices, and premises rental prices cannot be collected.

Source: https://baodautu.vn/batdongsan/tphcm-chot-ty-le-phan-tram-cac-chi-phi-loi-nhuan-lam-co-so-dinh-gia-dat-d259169.html