 |
| A corner of an urban area to be built in Bac Ninh province__Photo: VNA |
The Ministry of Agriculture and Environment has recently unveiled draft amendments to the 2024 Land Law, notably proposing to abolish the principle of market-based land valuation. This move has sparked debate among legal experts, investors, and the public over the shifting roles of the State and the market in land pricing.
From market-based pricing to valuation by the State
According to the Ministry of Agriculture and Environment, the revision of the 2024 Land Law aims to promptly address pressing practical issues, remove institutional bottlenecks, and promote socio-economic development.
One of the central changes lies in the proposed revision of the principles governing land valuation. Article 158.1 of the current law sets out five core principles, including: market-based land valuation; compliance with prescribed valuation methods, procedures, and processes; assurance of honesty, objectivity, and transparency; guarantee of independence among relevant authorities; and a balance of interests among the State, land users, and investors.
However, under the draft amendments, the market-based principle would be removed. Land valuation would be governed by four new principles:
(i) Guaranteeing the State’s role as the representative owner and the State’s right to decide on land prices; (ii) Using land valuation results obtained through professional methods as reference materials for the State in its pricing decisions; (iii) Ensuring compliance with established procedures and processes; and (iv) Aligning with state management requirements and local practical conditions.
This change marks a significant shift in policy thinking—from a market-oriented approach to an administrative one, where the State plays a central role in determining land prices. This transition could reshape not only valuation practices but also the broader legal, financial, and investment frameworks related to land.
Two policy options for revising land price tables
Alongside the changes to valuation principles, the Ministry has also proposed revising Article 159 of the 2024 Land Law regarding land price tables, offering two options.
Under the first option, provincial-level People’s Committees would adopt five-year land price tables, effective on January 1 of the first year of each period. If necessary, adjustments within the period would also be decided by the same authority. Land price tables would be prepared by zone and location, and for areas with cadastral maps and digital land price databases, they could be detailed down to individual land parcels.
Under the second option, land price tables would serve as the basis for calculating land use levies and land rental when the State allocates or leases land, permits land repurposing, or recognizes land use rights. Such tables would also be applied to determine land-related taxes and fees; to establish the rights and obligations of land users; and to calculate compensation in cases of land recovery. The Government would issue detailed regulations on the application of these tables.
Experts call for conceptual clarity and broader consultation
In a talk with VietNamNet, Dr. Pham Viet Thuan, Director of the Ho Chi Minh City Institute of Natural Resource and Environmental Economics, expressed support for removing the phrase “market-based land valuation” from the Land Law. From a technical perspective, he explained, the phrase is meant to stabilize market prices and promote transparency. However, in practice, it is often misinterpreted as requiring land prices to match or closely approximate market levels.
“There must be clarity and precision in the use of language when formulating land price tables. It should be explicitly stated what principles those tables are based on,” Dr. Thuan emphasized.
From the business perspective, Nguyen Quoc Hiep, President of GP-Invest and Chairman of the Vietnam Association of Construction Contractors, agreed that distinguishing between the primary and secondary land use rights markets is a sound policy.
He noted that while it is appropriate for the State to determine land prices, the key is ensuring that such prices are thoroughly researched and grounded in real-world conditions.
“To make land price tables workable, input should be sought from experts and businesses, the very stakeholders directly affected, so as to avoid valuations that are either excessively high or too low,” Hiep suggested.- (VLLF)
