On December 20, 2024, the Hanoi People's Committee issued Decision No. 71/2024/QĐ-UBND to amend and supplement certain provisions related to the capital city's land price table. The decision takes effect immediately and is applicable until the end of 2025.
Compared to the old land price table, the new table reflects an increase ranging from 2 to 6 times. Specifically, adjustments have been made to increase prices by 190% to 270%. Among these, 10 roads within Hoan Kiem District—Hàng Đào, Hàng Khay, Hàng Ngang, Lê Thái Tổ, Bà Triệu, Đinh Tiên Hoàng, Hai Bà Trưng, Lý Thường Kiệt, Trần Hưng Đạo, and Nhà Thờ—have seen an average increase of 270% for positions 1+2 and 245% for positions 3+4. After the adjustment, the land price for position 1 has risen from 187.9 million VND/m² to 695.3 million VND/m².
Other streets in the four inner districts—Ba Đình, Hoàn Kiếm, Đống Đa, and Hai Bà Trưng—have experienced an average increase of 245% for positions 1+2 and 225% for positions 3+4. Streets in three other districts—Cầu Giấy, Thanh Xuân, and Tây Hồ—have seen an average increase of 225% for positions 1+2 and 210% for positions 3+4.
The adjustment of the land price table to gradually align with market prices is a necessary step to comply with the new provisions of the Land Law. This adjustment carries significant implications in economic, social, and governmental management aspects. Below are the main considerations:
Increasing the City's Budget Revenue:
Higher land prices will increase the taxable base for various taxes, such as non-agricultural land use tax, personal income tax on real estate transfers, registration fees, and more. This will significantly enhance the city's budget revenue. Additionally, increased land prices will enable Hanoi to better assess the value of public land assets for transfer, auction, or use as collateral.
Reflecting Market Prices Accurately:
Previously, the land price table was often much lower than actual market transaction prices, leading to underreporting to reduce taxes. The adjustment will narrow the gap between state-regulated land prices and market prices, thereby reducing price disparities. This will make land transactions more transparent and equitable, minimize tax losses, and curb tax evasion. This adjustment is also a crucial preparatory step for the implementation of annual land price tables aligned with market prices, as stipulated in the 2024 Land Law, which will take effect in 2026.
More Efficient Land Allocation and Management:
As land prices rise, the opportunity cost of owning land also increases, prompting landowners to consider using their land more efficiently, avoiding waste or abandonment. Additionally, higher land prices will help the city implement better urban planning policies, reduce land speculation, and prevent improper land use. This contributes positively to land clearance, investment attraction, and the capital’s development.
Impact on Residents and Businesses:
Fees related to land (such as land-use conversion fees, registration fees, etc.) will increase, imposing greater financial burdens on residents and businesses. Higher land costs will pressure real estate developers, leading to price adjustments to cover costs, which in turn raises property prices. Furthermore, low-income groups will be significantly affected by rising land prices, necessitating more effective support policies for social housing or special land policies for low-income individuals.
The new price table meets practical needs, reduces disparities, and brings Hanoi's land prices closer to market values. This helps establish consistent land management policies and balances the interests of the State, land users, and those seeking land for projects. However, competent authorities must carefully study and consider reducing tax and fee rates related to land to avoid negative impacts and ensure alignment with residents' income levels.
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