Procedure for specific land price determination in Vietnam

Procedure for specific land price determination in Vietnam

Pursuant to the provisions of Clause 1, Article 16 of Decree 44/2014/ND-CP, the procedure for specific land price determination in Vietnam includes:

- Defining the purpose of specific land pricing

- Investigating, synthesizing, analyzing the information about the plot of land, the market price of land; applying the land pricing methods

- Making the land pricing plan and submitting it to the People’s Committee of the province

- Inspecting the land pricing plan;

- Completing the draft land pricing plan and submitting it to the People’s Committee of the province for approval.

- The Committee of the province shall impose land prices.

Procedure for specific land price determination in Vietnam (Internet image)

What do application for specific land pricing include?

Pursuant to the provisions of Clause 2, Article 16 of Decree 44/2014/ND-CP, the application for specific land pricing submitted to the Committee of the province for approval consists of:

- A report on the land pricing plan;

- The draft land pricing plan;

- A description of the formulation of the land pricing plan;

- A record of the inspection of the land pricing plan.

Verification of land pricing in Vietnam

Pursuant to the provisions of Clause 3, Article 16 of Decree 44/2014/ND-CP, the land pricing shall be verified by a Verifying Council which is established by the People’s Committee of the province and consists of:

- President of the People’s Committee of the province as the Council President.

- Senior representative of the Department of Finance of the province as permanent Council; senior representatives of Department of Natural Resources and Environment and the People’s Committee of the district where the piece of land is located, organizations licensed to provide consultancy on land pricing or specialists in land pricing and other members appointed by the People’s Committee of the province.

Responsible for issuing the decision on approval of a particular land price using direct comparison method, subtraction method, income-based method and surplus-based method in Vietnam

Pursuant to the provisions of Clause 1, Article 2 of Decree 10/2023/ND-CP (effective from May 20, 2023), in reference to application of direct comparison method, subtraction method, income-based method and surplus-based method, provincial People’s Committees shall be responsible for issuing the decision on approval of a particular land price within 90 days from the day on which a competent state agency issues the decision on assignment, lease or repurposing of land; permission for conversion from land lease arrangement under which annual rent payments are made into land lease arrangement under which the lump-sum rent payment is made for the entire lease term; extension or adjustment of the land use term.

- Direct comparison method is a land pricing method meant to compare and determine the price for a particular plot of land by analyzing prices for unoccupied plots of land with similar purposes, locations, profitability, infrastructure, area, shape, legitimacy that have been sold on the market or at auction (hereinafter referred to as comparable plots of land).

- The subtraction method is a land pricing method applied to the land with property attached to land by subtracting value of the property attached to land from total value of real estate (including land value and value of the property attached to land)

- The income-based method is a method used to determine land price by dividing the average annual net income from a land unit by average annual interest rate of 12-month term deposit on the pricing date at a state-owned commercial bank of which the deposit interest rate is highest in that province.

- The surplus-based method is a method used to determine the price of the land with development potential as a result of changes of zoning or purposes by subtracting estimated total cost from estimated total revenue of the real estate.

Mai Thanh Loi

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