Land valuation plays a crucial role in today's market economy. This activity not only provides a foundation for stabilizing the land market but also ensures the fulfillment of financial obligations regarding land by its users. However, the land valuation process under the 2013 Land Law and its guiding documents revealed numerous limitations and inadequacies, leading to negative consequences for land, causing disruptions in the real estate market, and adversely affecting the state's land management efforts. Therefore, the introduction of the 2024 Land Law and the Government's Decree No. 71/2024/ND-CP, with new regulations on land valuation, has approached the art of land valuation to align as closely as possible with market prices.
Decree No. 71/2024/ND-CP has abolished the land price framework regulation as stipulated in Decree No. 44/2014/ND-CP
This abolition not only aligns with the spirit of Resolution No. 18/NQ-TW, which advocates for the removal of the land price framework and establishes a mechanism and method for determining land prices based on market principles, but also addresses the previous limitations and inadequacies of the land price framework regulation. The creation of a land price framework without any changes over a long period has caused local land price tables to be completely detached from market prices, leading to land disputes, especially when calculating compensation prices during land acquisition. Furthermore, the removal of the land price framework regulation in Decree No. 71/2024/ND-CP also helps minimize the existence of two different land prices in land transactions. One price is agreed upon by the parties in the transfer contract, while the other is declared differently when notarizing the land use rights transfer contract at notary offices. This declared price is nearly in line with the lower end of the land price framework (much lower than the transfer price agreed upon by the parties according to civil law).
The bases for land valuation have been expanded in the 2024 Land Law to ensure that land valuation aligns as closely as possible with market prices
In addition to land use purposes provided for valuation and land use duration, Clause 2, Article 158 of the 2024 Land Law supplements the bases for land valuation, including: input information for land valuation according to land valuation methods; other factors affecting land prices; and relevant legal regulations at the time of land valuation.
The 2024 Land Law has made significant progress in specifying the content of input information in Clause 3 of the same article. Accordingly, this information includes land prices recorded in the national land database and national price database; land prices documented in land use rights transfer contracts; land prices achieved at auctions of land use rights after fulfilling financial obligations; land prices collected through investigation and survey in cases where land price information is not available; and information on revenue, costs, and income from land use. However, to maximize the effectiveness of this regulation during implementation, an official channel for providing these input data must be established with accurate input parameters. Real estate transfer transactions need to be listed on exchanges, using modern technology to publicly disclose transaction information. Additionally, the increasingly widespread application of bidding and land auction forms will ensure that land valuation in the state's land management closely aligns with market prices.
On the other hand, the current land law does not specifically define what constitutes 'other information affecting land prices.' While it may be impossible to fully enumerate all factors impacting land prices, this does not diminish the importance of this clause as it demonstrates the land law's efforts to include land valuation considerations that do not exclude the value of exploiting rights and other assets on the land plot, such as airspace height and subsurface depth. For example, the conditions regarding subsurface depth, and regulations ensuring sustainable development related to fields closely associated with the Land Law, such as the Law on Geology and Minerals, will also somewhat influence the mechanisms of land price formation.
In summary, expanding the bases for land valuation in accordance with the 2024 Land Law is a reasonable approach. This valuation is not limited to selecting criteria suitable for the four pathways of land price formation but also depends on external factors affecting the land plot. In other words, the input information for the land plot must include all relevant details that the land plot possesses (shape, size, formation history, origin, land use purposes, etc.)
The 2024 Land Law and its guiding documents, which officially took effect in August 2024, have contributed to enhancing the efficiency of land valuation, aligning it closely with market prices, thus preventing land resources from being wasted and avoiding bottlenecks. This ensures transparency and reliability.
Nguyen Duc Tien
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