Land law reform proposal would drop the principle of market-based land valuation

Vietnam’s draft amended Land Law proposes removing the requirement to value land according to market principles, replacing it with a system centered on official land price tables and adjustment coefficients.

The draft, prepared by the Ministry of Agriculture and Environment and recently published by the Ministry of Justice in a review dossier, would also remove provisions specifying when individual land prices apply. Land-use fees, land rents and compensation for state land recovery would instead be based on factors including area, use period, land-use purpose, the price in the official land table and the relevant adjustment coefficient.

The price tables would be built according to land type, area and location. The adjustment coefficient would represent increases or decreases for different land types and locations, taking account of planning and infrastructure conditions. The draft says prices decided by the state must be objective and transparent, follow the required procedures, rely on data and balance the interests of the state, land users and investors.

The ministry said current state land valuation depends on secondary-market prices, including transfers and leases, as well as consultancy results. It said determining specific land prices has proved difficult because it involves many inconsistent factors, affecting access to land and the progress of investment projects. Risks surrounding specific valuations can also make officials reluctant to take responsibility, prolonging implementation.

Under the proposal, provincial People’s Committees would prepare the land price tables and adjustment coefficients for approval by provincial People’s Councils, with later amendments handled through the same system. National Assembly delegate Hoang Minh Hieu said the tables and coefficients would become the “almost sole” basis for financial obligations and compensation if specific land prices disappear. He called for mandatory periodic reviews and automatic reviews when actual market transaction prices move beyond a defined range.

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almost the sole