What are methods of land valuation in Vietnam under the Land Law 2024?

What are methods of land valuation in Vietnam under the Land Law 2024?

Based on Clause 5, Article 158 of the Land Law 2024 which stipulates the principles, bases, and methods of land valuation:

Article 158. Principles, bases and methods of land valuation

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5. Land valuation methods include:

a) The comparison method is conducted by adjusting the price levels of parcels with the same land use purpose and certain similarities in factors affecting land prices, which have been transferred on the market or auctioned with completed financial obligations according to the auction decision through analysis and comparison of factors affecting land prices after excluding the value of assets attached to the land (if any) to determine the value of the parcel needing valuation;

[...]

According to the above regulation, there are 04 land valuation methods. To be specific:

[1] Comparison Method is conducted by adjusting the price levels of parcels with the same land use purpose and certain similarities in factors affecting land prices, which have been transferred on the market or auctioned with completed financial obligations according to the auction decision through analysis and comparison of factors affecting land prices after excluding the value of assets attached to the land (if any) to determine the value of the parcel needing valuation.

[2] Income Method is conducted by dividing the average annual net income per land area by the average savings deposit interest rate for Vietnamese currency with a 12-month term at commercial banks where the State holds over 50% of the charter capital or total voting shares in the provincial area for 03 consecutive years up to the end of the most recent quarter with available data before the land valuation time.

[3] Surplus Method is conducted by taking the total estimated development revenue minus the total estimated development cost of a land parcel or land zone based on the most efficient land use (land use coefficient, construction density, maximum building height) according to the approved land use planning or detailed construction planning by the competent authority.

[4] Land Price Adjustment Coefficient Method is conducted by multiplying the land price in the land price list by the land price adjustment coefficient. The land price adjustment coefficient is determined through comparison between the land price in the land price list and the market land price.

Additionally, the Government of Vietnam stipulates other land valuation methods with the consent of the Standing Committee of the National Assembly.

What are methods of land valuation in Vietnam under the Land Law 2024? (Internet image)

For which cases is the land price list applied?

Based on Article 159 of the Land Law 2024, the land price list is applied for the following cases:

- Calculating land levy when the State recognizes the usage rights of homestead land for households, individuals; changing the land use purpose of households, individuals.

- Calculating land rent when the State leases land and collects annual land rent.

- Calculating land use tax.

- Calculating income tax from transferring land use rights for households, individuals.

- Calculating fees in land management and usage.

- Calculating fines for administrative violations in the land field.

- Calculating compensation for the State when causing damage in land management and usage.

- Calculating land levy, land rent when the State recognizes land use rights through land allocation with land levy, or land lease with a one-off land rent payment for the entire lease period for households, individuals.

- Calculating the starting price for auctioning land use rights when the State allocates land, leases land for parcels or zones with infrastructure investment according to detailed construction planning.

- Calculating land levy for cases not through auction for allocation of land use rights to households, individuals.

- Calculating land levy for cases of selling State-owned houses to tenants.

Who are included in the land price list appraisal councils in Vietnam?

Based on Article 161 of the Land Law 2024, the land price list appraisal councils in Vietnam includes the following subjects:

[1] The land price list appraisal councils established by the decision of the provincial People's Committee includes:

- Chairman of the provincial People's Committee or 01 Vice Chairman of the provincial People's Committee as the Chairman of the Council.

- Head of the provincial financial department as Vice Chairman of the Council.

- Chairman of the district or commune People's Committee where the land is located and representatives from relevant organizations and agencies.

Additionally, the provincial People's Committee may invite representatives from land valuation consultancy organizations or land valuation experts to participate as members of the Council.

[2] The land price list appraisal councils established by the decision of the district People's Committee includes:

- Chairman of the district People's Committee or 01 Vice Chairman of the district People's Committee as the Chairman of the Council.

- Head of the district financial department as Vice Chairman of the Council.

- Leaders of relevant departments, organizations.

- Chairman of the commune People's Committee where the land is located.

Additionally, the district People's Committee may invite representatives from land valuation consultancy organizations or land valuation experts to participate as members of the Council.