Decree 71/2024/ND-CP: New regulations on land prices in Vietnam

On June 27, 2024, the Government of Vietnam issued Decree 71/2024/ND-CP stipulating land prices. This Decree specifies the methods for land valuation as per point c, clause 2, Article 257 of the Land Law, and clearly outlines the factors affecting land prices.

1. Land valuation methods according to point c, clause 2, Article 257 of the Land Law 2024 in Vietnam

In accordance with point c, clause 2, Article 257 of the Land Law 2024:

(c) In cases where land has already been allocated, leased, permitted for change of use purpose, allowed to change the form of lease payment from annual to one-time for the entire lease period, extended use duration, adjusted use duration, revised detailed construction planning according to the provisions of the Land Law No. 45/2013/QH13 and related documents but the land pricing plan has not been presented to the competent authorities, the policies on land levy, land rent, and land prices are determined at the time of issuance of such decision.

In cases where the competent authorities have allocated or leased land according to the compensation, support, and resettlement progress, the specific land price should be determined at the time of issuance of each respective decision;

Also, Article 9 of Decree 71/2024/ND-CP on land valuation methods in cases prescribed at point c, clause 2, article 257 of the Land Law include 04 instances as follows:

(1) In cases of land allocation with land levy, land lease with one-time land rent payment for the entire lease period as prescribed at the time of decision issuance: to apply the land price adjustment coefficient method.

In cases of annual land rent payment: apply the land price table multiplied by the land price adjustment coefficient at the time of decision issuance.

In cases of decision issuance between July 1, 2014, and December 31, 2014, applying the land price adjustment coefficient method and annually paid land rent: apply the land price table at the time of decision issuance multiplied by the land price adjustment coefficient for 2015.

(2) In cases of land allocation with land levy, land lease with one-time land rent payment for the entire lease period as prescribed at the time of decision issuance, not applying the land price adjustment coefficient method: apply the methods stipulated at 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.

(3) In cases of land allocation or lease according to compensation, support, and resettlement progress: depending on the specific case to apply the land valuation methods mentioned in (1) and (2) above according to each decision.

(4) For case (3) mentioned above, when applying the surplus method for land valuation, it should be handled as follows:

+ If there are sufficient conditions to estimate development revenue and development costs of the land parcel or land zone, the estimated development revenue and costs are determined according to the area of the land allocation or lease decision;

+ If it is not possible to fully estimate the development revenue of the land parcel or land zone or the estimated development costs exceed the estimated development revenue for the area requiring land valuation, the estimated development revenue and costs are determined for the entire project according to the detailed construction planning or overall site planning approved by the competent authority.

Additionally, the Decree also clearly states that the determination of land prices using the surplus method for the cases stipulated in clause 4 of this Article is detailed in Example No. 04 of Appendix II attached to this Decree.

Thus, the land valuation method according to point c, clause 2 of Article 257 of the Land Law of Vietnam consists of 04 valuation instances mentioned above.

2. What are factors affecting land prices in Vietnam?

In Article 8 of Decree 71/2024/ND-CP, the factors affecting the prices of non-agricultural land and agricultural land include:

- Non-agricultural Land

+ Location and site of the land parcel or land zone;

+ Traffic conditions: road width, road surface structure, adjacency to one or multiple roads;

+ Conditions of water supply and drainage, electricity supply;

+ Area, size, and shape of the land parcel or land zone;

+ Factors related to construction planning include: land use coefficient, construction density, building setback lines, height limits for construction works, limits on the number of basement floors allowed according to detailed construction planning approved by competent state agencies (if any);

+ Current environmental status, security;

+ Duration of land use;

+ Other factors affecting land prices suitable to the actual conditions, cultural traditions, and customs of the locality.

- Agricultural Land

+ Crop and livestock productivity;

+ Location and characteristics of the land parcel or land zone: the nearest distance to production and product consumption sites;

+ Traffic conditions serving production and product consumption: road width, road grade, road surface structure; terrain conditions;

+ Duration of land use, except for agricultural land allocated by the state to households or individuals according to the agricultural land allocation limit, agricultural land within the transfer limit is not based on the duration of land use;

+ Other factors affecting land prices suitable to actual conditions, cultural traditions, and customs of the locality.

Based on the above regulations, non-agricultural land has 08 factors, and agricultural land has 05 factors affecting land prices according to Decree 71/2024/ND-CP.

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