05 Methods of land valuation in Vietnam under the Land Law 2024

Methods of land valuation in Vietnam under the Land Law 2024 (Internet image)

Regarding this matter, LawNet would like to answer as follows: 

1. 05 Methods of land valuation in Vietnam under the Land Law 2024

Methods of land valuation according to Clause 5, Article 158 of the Land Law 2024 include:

- The comparison method is applied by adjusting prices of land parcels with the same purpose, certain similarities in factors affecting the price of land that has been conveyed in the market, hammer price of land use rights of the land whose holder (successful bidder) has fulfilled the financial obligations according to the decision to recognize the successful bidder through the analysis and comparison of factors affecting the land price after excluding the value of property affixed to the land (if any) to determine the price of the land parcel to be valued;

- The income-based method is implemented by dividing the average annual net income per land area by the average annual interest rate of 12-month term deposits in Vietnamese currency at commercial banks in which the State holds more than 50% of the charter capital or the total number of voting shares in the province for 03 consecutive years up to the end of the latest quarter with data before the valuation;

- The surplus-based method is implemented by subtracting the total estimated development cost from the total estimated development revenue of the land parcel or land zone on the basis of the highest efficiency of land use (land use coefficient, construction density, maximum number of floors of a building) according to the land use planning, detailed construction planning approved by competent authorities;

- The land price adjustment coefficient method is applied by multiplying the land price in the land price list by the land price adjustment coefficient. The land price adjustment coefficient is determined by comparing the land price in the land price list with the land price on the market;

- The Government shall prescribe other land valuation methods not specified at points a, b, c and d of Clause 5, Article 158 of the Land Law 2024 after obtaining the consent of the Standing Committee of National Assembly.

The Land Law 2024 shall take effect from January 1, 2025, except for the following provisions:

- Articles 190 and 248 of the Land Law 2024 shall take effect from April 1, 2024,

- Clause 9, Article 60 of the Land Law 2024 shall take effect from the date Resolution 61/2022/QH15 expires.

2. Land valuation methods in Vietnam under Decree 12/2024/ND-CP

According to Article 4 of Decree 12/2024/ND-CP (currently in effect), regulations on land valuation methods in Vietnam include:

- The comparison method is applied by adjusting prices of land parcels with similar purposes and certain commonalities on factors affecting the land price that have been sold on the market or at auction which already fulfilled financial obligation according to a winning decision. It is based on analyzing and comparing factors affecting land prices after subtracting the value of property on land (if any) to determine the price of the land parcel to be valued.

- The income-based method is implemented by dividing the average annual net income from a land unit by the average annual interest rate of 12-month term deposits in Vietnamese currency at commercial banks where more than 50% of the charter capital is held by the State or the total number of voting shares in the province for 3 consecutive years up to the end of the latest quarter with data before the valuation date.

- The surplus-based method is performed by subtracting the estimated total cost from the estimated total revenue of the land parcel or land zone (land use coefficient, building coverage ratio, 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 applied by multiplying the land price coefficient by the land price in the land schedule.  The land price coefficient is promulgated by the People's Committee of the province or centrally affiliated city (hereinafter referred to as provinces) by comparing the land price in the land schedule with the popular land price on the market.

Vo Thi My Trinh

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