When releasing the new land price list, valid from December 20, 2024 to the end of December 31, 2025, Hanoi authorities affirmed that the new land prices closer to market prices will create ‘fair’ play and stop the ‘dual price’ phenomenon.

“Dual price’ is understood as official prices set by local authorities and market prices recorded in real transactions. In general, market prices are always much higher than official prices.

However, the new land price list is expected to lead to a surge in land use fees.

Pham B from My Duc district in Hanoi told VietNamNet that in late 2024 that he had completed payment of land use fees to convert part of his land from residential to garden land. 

As the administrative procedures were completed after December 20, 2024, he had to pay VND800 million in accordance with the new land price list. If the old land price list had been applied, he would have paid VND350 million.

Nguyen T from Long Bien district said her family has more than 1,000 sq m of garden land and if family members want to convert the land into residential land, they will have to pay VND15 million per sq m. 

If so, the total amount of money to convert the entire 1,000 sq m into residential land would be VND15 billion, the amount of money beyond the family’s financial capability. They have not made a final decision.

Increased land prices leading to higher land use fees have also forced many investors who hoard agricultural land in suburban areas to adjust their investment plans. 

Cao N from Ha Dong district said he regrets not converting his agricultural and cropland in Chuong My and Thach That districts into residential land earlier.

“The new land prices in the areas are 2-4 times higher than the old land prices, which means that the costs to convert agricultural land into residential land must be much higher,” he explained, adding that he postponed the plan to convert land while listening to the news. 

Prof Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, said at a recent seminar that no matter if land prices are low or high, there are always "complaints."

Vo emphasized that land price lists should reflect real market prices. The problem is how to apply the land price lists. This is the matter that the state needs to think about.

“The State will determine when 100 percent market prices are applied and when just 50 or 80 percent of market prices should be used. The different proportions will be designed for specific cases to optimize investment attraction, economic development and social security,” he said.

Le Van Binh, Deputy Director of the Land Department, said real estate projects (housing, resort real estate) don’t apply land price frameworks, but use specific land use fee calculation methods.

Land price frameworks are mostly used to calculate financial obligations of households, individuals and those who lease land annually. In other cases, the land prices applied are winning prices at auctions.

Regarding the cost of converting land of different types to residential land, Binh said that the conversion is easy and simple now.

Previously, the conversion process was tough because the prices applied were just equal to half of real residential land prices. Now, the process is simple and transparent as the conversion cost is calculated based on new land prices.

“Many people may rethink their land conversion land when informed about higher costs, and they will have to think carefully before making decisions, and convert smaller land area, 50 sq m, instead of 200 sq m, for instance,” he said.

“In all games, all players must be on equal footing," Binh said. 

"Low land prices can benefit certain groups of market subjects, but cause losses to the state budget and affect people who have to give land to the state for use for development projects,” he explained.

“As new prices are now closer to market prices, people will be more ready to give land as they can expect higher compensation,” he added.

This will facilitate site clearance, thus helping to accelerate project execution and reduce costs.

Hong Khanh