Synchronize land pricing regulations promptly

The amended Land Law contains more specific provisions on land valuation than the Land Law 2013, such as Article 112, Section 2 of the Land Law 2013, which "assigns the Government to regulate land valuation methods," resulting in the Government issuing Decree No. 44/2014/ND-CP, which prescribes 5 "land valuation methods" (Article 4) and "application of land valuation methods" (Article 5).

However, Section 5 of Article 158 of the new Land Law specifically prescribes four land valuation methods, including "comparative method," "income method," "residual method," and "land price adjustment coefficient method," and allows "the Government to regulate other land valuation methods not specified at points a, b, c, and d of this section after obtaining the consent of the Standing Committee of the National Assembly" and Section 6 of Article 158 of the amended Land Law.

The Association understands that the new Land Law will take effect on January 1, 2025, including "regulations on land pricing," but in 2024, the work of land pricing will still have to be carried out according to the regulations of the Land Law 2013, so it is very necessary and urgent to issue the "Decree amending and supplementing some articles of Decree No. 44/2014/ND-CP dated 15/05/2014 on land pricing" to promptly resolve the difficulties in land valuation and land price a

However, the Association believes that certain recommendations remain acceptable and realistic. HoREA continues to propose revisions to the "Draft Decree revising and supplementing Decree No. 44/2014/ND-CP".

First, Section 2 of Article 5b of Decree 44/2014/ND-CP proposes rearranging "the order of priority from the sources of information on land prices," with a focus on selecting "information sources on land prices" from state management agencies.

The following sources, in order of priority, provide information for implementing the land value technique provided in Section 1 of this Article: National land database and land pricing; Units coordinating land use right auctions at enforcement agencies, lending institutions having land use rights to be auctioned; and land fund development organizations.

Tax authorities, agricultural and rural development agencies; notary offices. Real estate trade floors, real estate companies with accreditation and stamp. Land value consulting firms, pricing evaluation; Credit organizations, associations, research institutes, and centers.

Land prices can be found in classified advertisements, advertising, marketing regarding buying, selling, and transferring houses, land in the mass media, marketing websites for real estate projects, commercial housing, by local brokers, or in the neighborhood where the land is to be valued.

Direct interviews, with or without the transferor's or transferee's consent, are non-binding sources of information for the Land Price Appraisal Council, the competent authority to set land prices.

Second, it is suggested to revise and supplement Section 8 of Article 1 of the "Draft Decree 44" by adding Article 5d to Decree No. 44/2014/ND-CP, which addresses "the technique and substance of determining land prices using the residual method." As a result, from calculating the overall development revenue of the land plot, land area, to estimating the whole development costs of the land plot and land area, calculate the total investment cost of building.

Third, it is suggested to revise and supplement Section 9 of Article 1 of "Draft Decree 44" by adding Article 5e to Decree No. 44/2014/ND-CP on "the technique and substance of establishing land prices using the land price adjustment coefficient method."

The natural resources and environment authority at the same level will advise the People's Committee at the competent level to determine the land price adjustment coefficient for each project or area to be applied in the case specified at points d and đ of Section 4 of Article 5 of this Decree. The development of the land price adjustment coefficient as stipulated in this point must adhere to the restrictions outlined in Section 2 of this article.

Determine the current market land price in the region with the property plot or land area to be appraised. Statistically, market land prices by land location are determined using the information acquired as specified in point b of this section and the prevalent market land price in the region with the land plot and land area to be valued.

If market land prices are concentrated in a price range, the market land price of each land plot or land area to be valued is calculated by taking the arithmetic average of the land price levels in the region around the land plot or land area to be valued.

The land price adjustment coefficient for each land plot, land area to be valued is calculated by dividing the current market land price in the area with the land plot, land area to be valued by the land price on the land price list at that location.