Four Cases Affected by the New Land Price Table in Ho Chi Minh City

According to the Ho Chi Minh City Real Estate Association (HoREA), Decision No. 79/2024 regarding the new adjusted land price table has been issued and is expected to significantly impact several groups of land users, specifically four groups likely to face unintended consequences. These effects extend beyond land use costs, impacting the economic lives and rights of individuals and households alike.

Case 1: Individuals seeking to register land use rights, particularly those related to 13,035 plots where users have not been issued an official “Land Use Rights Certificate.” These plots are typically for long-term use but have yet to complete the legal process to formalize ownership rights. The new land price table may increase certification costs, posing greater challenges for land users trying to legalize their ownership. This includes additional financial burdens in the form of registration fees, survey fees, and other administrative expenses, which particularly affect low-income households.

Beyond costs, the legal procedures involved in recognizing land use rights may become more complex. The adjusted land price table could change the way land value is calculated, affecting fees paid by land users. This creates substantial pressure on those who have yet to complete registration, especially given today’s volatile economic conditions, amplifying the uncertainties many citizens face.

Case 2: Individuals applying to change the use of agricultural or non-agricultural land within the same plot as residential land. This situation is particularly relevant for plots with existing residential “pink book” certificates, interspersed within urban or rural residential areas. Changing the land’s purpose in these cases isn’t just a matter of cost but also requires approval from local management authorities. The new land price table may raise conversion costs, making it harder for residents to convert and legalize land use.

Residents in mixed urban-agricultural areas often seek to change land use to align with residential and renovation needs. However, with the new land price table, these costs could increase significantly, making legalization distant for many families. This could hinder residential development in these areas, affecting Ho Chi Minh City’s urban planning and development goals.

Case 3: Land users applying to subdivide plots of residential, agricultural, and non-residential non-agricultural land while converting the land to “residential” for their descendants. With the new land price table, the cost of this process will increase, creating financial obstacles for families looking to divide their property. Land subdivision and conversion often occur when parents wish to divide land for their children to build homes, meeting increasing housing needs.

However, with higher conversion and subdivision costs, this process becomes more challenging and expensive. In cases involving large areas of land, dividing it into smaller plots requires compliance with stricter regulations and higher fees. This complicates administrative procedures, prolongs processing times, and delays property transfers to future generations.

Case 4: Individuals and families with properties in "suspended planning" areas, such as the Bình Quới - Thanh Đa project, will also feel negative effects. Suspended planning projects often limit residents' land use rights, including building and transferring rights. If planning is lifted, residents may face higher land use fees, leading to double hardship for families whose land rights have been suspended for an extended period.

Lifting suspended planning is often expected to benefit residents by enabling them to use and develop their land legally. However, with the new land price table, costs related to legalizing land use after planning suspensions are lifted may exceed the financial capacity of many households, particularly middle- and low-income families. This could mean lost opportunities for effective land use and additional unwanted fees.

Impacts of the New Land Price Table on Ho Chi Minh City’s Real Estate Market

According to HoREA, the new land price table won’t immediately impact Ho Chi Minh City’s real estate market but will become more evident in the second phase when real estate businesses begin transferring land use rights to implement real estate, urban, commercial, and social housing projects. At that point, housing prices are likely to rise due to a higher valuation mindset, creating upward price pressure across the market.

Higher land prices in the second phase also mean increased input costs for real estate projects. This could lead developers to adjust product prices to ensure profitability, potentially driving up housing prices, especially for commercial and social housing. Furthermore, speculative behavior from certain individuals and organizations may destabilize the market, inflating land values unsustainably and risking a real estate bubble.

Additionally, the new land price table will directly affect the process of issuing Land Use Rights Certificates, home ownership rights, or land use conversion. These cases will incur higher land use fees than before, creating a financial burden on land users and families seeking to legalize their land rights. This impacts not only costs but also creates challenges regarding time and administrative procedures, making legalization more complex and prolonged.

HoREA has proposed that state management agencies increase legal education and guidance to help residents and businesses better understand new regulations, raising legal awareness and encouraging compliance. Meanwhile, HoREA calls for measures to control land speculation, ensuring the real estate market operates transparently and healthily, avoiding negative fluctuations caused by speculation.

Speculation control and legal education are crucial in a volatile land pricing environment. Without suitable management measures, the market may become unstable, adversely affecting housing accessibility, especially for low-income individuals. Moreover, establishing a transparent and clear land price management mechanism will contribute to fairness in land resource use, supporting the sustainable development of Ho Chi Minh City’s real estate market.