The Government issued a new decree on land prices.

Clause 5, Article 158 of the 2024 Land Law stipulates land valuation methods, including: The comparison method is implemented by adjusting the price of land plots with the same land use purpose, certain similarities in factors affecting the land price transferred on the market, winning the auction of land use rights for which the auction winner has fulfilled financial obligations according to the auction winning decision through analyzing and comparing factors affecting land price after excluding the value of assets attached to the land (if any) to determine the price of the land plot to be valued.

The income method is implemented by taking the average annual net income per land area divided by the average savings interest rate of 12-month term deposits in Vietnamese Dong at commercial banks in which the State holds more than 50% of the charter capital or total voting shares in the provincial area for 3 consecutive years up to the end of the most recent quarter with data before the time of land valuation.

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.

The land price adjustment coefficient method is implemented by multiplying the land price in the land price table by the land price adjustment coefficient. The land price adjustment coefficient is determined by comparing the land price in the land price table with the market land price.

Clarifying the procedures and contents of land price determination Decree 71/2024/ND-CP specifically stipulates the procedures and contents of land price determination according to 4 methods including comparison, income, surplus, and land price adjustment coefficient.

The Decree also specifically stipulates the application of land valuation methods in the cases specified in Point c, Clause 2, Article 257 of the Land Law. In the case of land allocation with land use fee collection, land lease with one-time land rent payment for the entire lease term, which, according to the regulations at the time of issuance of the decision, is subject to the application of the land price adjustment coefficient method, and in the case of land lease with annual land rent payment, the land price table multiplied by the land price adjustment coefficient at the time of issuance of the decision shall apply.

In case the decision is issued from July 1, 2014 to December 31, 2014 and falls under the case of applying the land price adjustment coefficient method at the time of decision issuance and in case of land lease with annual land rent payment, the land price table at the time of decision issuance multiplied by the land price adjustment coefficient in 2015 shall be applied.

In case of land allocation with land use fee collection, land lease with one-time land rent payment for the entire lease term, which according to the regulations at the time of issuance of the decision is not applicable to the land price adjustment coefficient method, the methods prescribed in Points a, b, c, Clause 5, Points a, b, c, Clause 6, Article 158 of the Land Law and Articles 4, 5, 6 of this Decree shall apply.

In case of land allocation and land lease according to compensation, support and resettlement progress, depending on each specific case, land valuation methods and factors affecting land prices will be applied.

The Decree specifically stipulates factors affecting land prices. Accordingly, factors affecting land prices for non-agricultural land include the location and site of the land plot or land area; Traffic conditions: width, road surface structure, adjacent to 1 or more roads; Water supply and drainage conditions, electricity supply; Area, size, shape of the land plot or land area; Factors related to construction planning include: land use coefficient, construction density, construction boundaries, height limits of construction works, limits on the number of basements built according to detailed construction planning approved by competent state agencies (if any); Current environmental and security status; Land use term; Other factors affecting land prices in accordance with actual conditions, cultural traditions, and local customs and practices.

Factors affecting land prices for agricultural land, including crop and livestock productivity; Location, characteristics of land plots and land areas: nearest distance to production and product consumption locations; Traffic conditions serving production and product consumption: road width, road grade, road surface structure; terrain conditions; Land use term, except for agricultural land allocated by the State to households and individuals according to the agricultural land allocation quota, agricultural land within the quota for receiving transfer rights is not based on the land use term; Other factors affecting land prices are consistent with the reality, cultural traditions, and customs of the locality.

The Decree clearly states that based on the actual situation in the locality, the organization implementing the proposed land valuation shall have the Department of Natural Resources and Environment preside over and coordinate with relevant departments and branches to advise and submit to the Provincial People's Committee to specify the factors affecting land prices, the maximum difference of each factor affecting land prices to determine a certain level of similarity, and the method of adjustment for each difference of each factor affecting land prices.

In case the provincial People's Committee has not yet specified or has insufficiently specified the factors affecting land prices, the maximum difference of each factor affecting land prices, and the adjustment method for each difference of each factor affecting land prices, the organization implementing land valuation shall propose specific details in the explanatory report on the development of the land price plan for the Land Valuation Council to consider and decide.

The Decree stipulates the responsibilities of agencies and units in providing information. Accordingly, agencies, organizations and units assigned to manage, exploit and use information sources specified in Point b, Clause 2, Article 4 and Point b, Clause 1, Article 5 of this Decree are responsible for providing information to serve land valuation work in writing or electronically within 5 working days from the date of receipt of the request document of the organization performing land valuation.