Land valuation methods follow market principles. Photo: H.D

Accordingly, they are the direct comparison method, income-based method, surplus-based method, and land price adjustment coefficient method.

The direct comparison method is applied by adjusting prices of plots of land 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 analysing and comparing factors affecting land prices after subtracting the value of property attached to the land(if any) to determine the price of the land plot 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.

The surplus-based method is performed by subtracting the estimated total cost from the estimated total revenue of the land plot or land area (land use coefficient, construction density, 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 price lists. The land price coefficient is promulgated by the People's Committee of the province or centrally run city (hereinafter referred to as provinces) by comparing the land price in the land price list with the popular land price on the market.

In addition, Decree 12 also details conditions for applying those methods.

Accordingly, the information about land price, land rent price, and rent price of a house used to apply direct comparison method, surplus-based method and land price adjustment coefficient method are included: winning price at auction of land use rights for that winner has completed the financial obligations according to the winning decision; land price that has undergone tax procedures at the tax office or registered at the land registration office for cases of transfer of land use rights; land rental price, price of rent a house; land transfer price on the market.

The Decree also clearly stated that the information to apply the land pricing method is valid within no more than 24 months from the time of land valuation backward, with priority given to using information closest to the time of valuation and collected from several sources according to regulations.

Regarding the decision on specific land prices, Decree 12 stipulated that based on principles of land valuation, conditions for applying land valuation methods, and results of appraisal of land price plans of the specific land price appraisal council, the provinces decide on specific land prices or the district-level People's Committee which decides on specific land prices in cases where the provincial-level People's Committee authorizes it according to the provisions of the Law on Local Government Organization.

Previously, at the 5th Extraordinary Session of the 15th National Assembly, the Land Law (amended) was passed. The Land Law 2024 includes 16 chapters and 260 articles.

According to the Office of the National Assembly, the Land Law (amended) has perfected many regulations and policies. These include regulations on the mechanism for determining land prices according to market principles, inspection and supervision mechanisms of the Central Government and the People's Council in the formulation of land price lists...

At the press conference of the Government in early February, Deputy Minister of Natural Resources and Environment Le Minh Ngan said that it was expected that the Government would issue nine decrees and relevant ministries would issue 6 circulars to guide the implementation of the Land Law (amended), but they would review current legal documents to ensure synchronization and consistency in the implementation.