The pricing and collection of land use fees under the new Land Law have left many households confused due to unexpectedly high costs. According to the Ministry of Agriculture and Environment (MARD), land pricing must align with the market, be transparent, and distinguish clearly between different user groups.

On July 3, the Ministry of Agriculture and Rural Development held a press conference to review activities in the first half of the year and outline tasks for the second half.

One issue raised was the high cost of changing land use purposes under the 2024 Land Law, which has led to numerous implementation challenges in localities. Many residents have reported that the fees for converting agricultural land to residential use far exceed the initial value of the plots.

In one example from Nghe An province, a plot initially valued at approximately 3 billion VND (about $118,000) carried a land-use conversion fee of 4.5 billion VND (about $177,000) – a significant gap that left the resident confused and unable to access the policy.

In response, the Ministry of Finance is proposing a model in which land-use fees are set at 50% of the difference between residential and agricultural land prices.

However, representatives from MARD emphasized that land prices must reflect market values to ensure fairness, transparency, and balanced benefits among stakeholders.

Mai Van Khanh, Deputy Director of the Land Administration Department under MARD, explained that under the 2013 Land Law, land prices were based on government-set frameworks, which were usually much lower than real market values. This discrepancy made land acquisition for public investment projects difficult, as compensation was too low, often stalling major infrastructure developments.

“This has been one of the major barriers to socio-economic development, especially during efforts to accelerate public investment disbursement,” Khanh noted.

According to Khanh, Central Resolution No. 18/2022 mandates that land prices must align more closely with reality and the market. This ensures fair compensation for those whose land is expropriated, while new land users contribute appropriately to the national budget.

“Our policy now is to determine specific land prices based on market values. MARD is working with the Ministry of Finance to review and adjust relevant regulations accordingly,” Khanh said.

Land-use conversion fees must not be uniform

Addressing concerns about the high cost of land-use conversion, Khanh stressed that a flat fee for all cases is inappropriate. Authorities need to clearly distinguish between genuine residential needs and speculative or commercial interests.

“We are studying a differentiated approach, avoiding a blanket 100% fee rate for all cases. There must be specific classifications linked to actual land-use purposes,” he said.

Responding to a question on the connection between land prices and the real estate market, the Land Administration Department representative stated that local governments must base new pricing frameworks on objective assessments of local real estate markets, economic development capacity, and public investment potential.

“Provincial and municipal People’s Committees must complete land price frameworks by December 31 to ensure timely application in the new year. The Ministry has issued guidelines requiring thorough impact assessments and practical feasibility,” Khanh confirmed.

Vu Diep