What are 4 land pricing methods from February 5, 2024 in Vietnam?

What are 4 land pricing methods from February 5, 2024 in Vietnam?

On February 5, 2024, the Government issued Decree 12/2024/ND-CP amending and supplementing Decree 44/2014/ND-CP regulating land prices and Decree 10/2023/ND-CP amending and supplementing a number of articles of Decrees guiding the implementation of the Land Law.

According to Decree 12/2024/ND-CP amends 04 land valuation methods including:

(1) The comparison method is carried out by adjusting the price of land plots with the same land use purpose, certain similarities in factors that affect the price of transferred land on the market, and win an auction of land use rights where the auction winner has fulfilled the financial obligations according to the winning auction decision through analyzing and comparing factors affecting land prices after excluding the value of assets attached to land (if any) to determine the price of the land plot to be valued.

(2) The income method is implemented by dividing the average annual net income per land area by the average savings deposit interest rate of 12-month term deposits in Vietnamese currency at banks. Commercial enterprises in which the State holds more than 50% of the charter capital or the total number of shares with voting rights in the provincial area for 03 consecutive years up to the end of the latest quarter with data before the time of valuation.

(3) The residual method is implemented by subtracting the total estimated development costs of the land plot or land area based on the most effective land use (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.

(4) The land price adjustment coefficient method is implemented by multiplying the land price in the land price list with the land price adjustment coefficient. The land price adjustment coefficient is issued by the Provincial People's Committee through comparing the land price in the land price list with the popular land price on the market.

What are 4 land pricing methods from February 5, 2024 in Vietnam? (Image from the Internet)

What factors affect land prices in comparison method in Vietnam?

In Article 5a of Decree 44/2014/ND-CP supplemented by Clause 4, Article 1 of Decree 12/2024/ND-CP, factors affecting land prices in the comparison method include:

- Location and location of the plot of land: closest distance to administrative centers, commercial centers, markets, medical facilities, education and training, sports, parks, and recreation areas;

- Traffic conditions: width, road surface structure, adjacent to 01 or more road surfaces;

- Conditions of water supply and drainage, electricity supply;

- Area, size, shape of the plot of land or plot of land;

- Factors related to construction planning include: land use coefficient, construction density, construction boundaries, limits on construction height, limit on number of basements built according to planning Construction details approved by competent state agencies (if any);

- Current status of environment and security;

- Factors related to production conditions for agricultural land, including: irrigation system, terrain, transportation system serving production; h) Other factors affecting land prices consistent with actual conditions, cultural traditions, and local customs and practices;

- Term of land use. For agricultural land allocated by the State to households and individuals according to the agricultural land allocation limit, agricultural land within the transfer rights limit is not based on the land use term;

- Legality of land use rights.

What does surveying and collecting information for comparable land plots include in Vietnam?

In Article 5c of Decree 44/2014/ND-CP supplemented by Clause 6, Article 1 of Decree 12/2024/ND-CP, there are regulations on the order and content of determining land prices according to comparison method as follows:

The order and content of determining land prices according tocomparison method

1. Survey and collect information about the land plot and land area that needs valuation, including:

a) Location, location, land use purpose, area, size, shape, traffic conditions, water supply and drainage conditions, electricity supply, term of use;

b) Information on detailed construction planning approved by competent state agencies,

c) Other information and documents related to factors affecting the price of the land plot or land area to be valued (if any).

2. Survey and collect information for comparable land plots, including:

a) The value of the comparable land plot is collected according to the provisions of Clauses 1 and 2, Article 5b of this Decree, time of transfer, winning auction;

b) Land use purpose;

c) Factors affecting land prices as prescribed in Article 5a of this Decree.

....

Thus, surveying and collecting information for comparable land plots includes the following contents:

- Value of the land plot compared to collected, time of transfer, winning auction;

- Purpose of using land;

- Factors affecting land prices.

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