Real estate developments in Thủ Thiêm urban area in Thủ Đức City. HCM City authorities have updated land prices with increases of four to 38 times compared to previous rates. — VNS Photo Bồ Xuân Hiệp

HCM CITY — HCM City authorities have updated land prices to over VNĐ687 million (US$27,000) per square metre in central districts and VNĐ2.3 million on the outskirts, up four to 38 times compared to previous rates.

The new prices are for residential land and will be used to calculate land compensation, land-related taxes and fees and fees for administrative procedures, aiming to boost state tax revenue.

People who transact land below the new prices could have their transactions reviewed by authorities because taxes and fees will now be based on the new rates.

In addition, the adjustment also aims to enhance compensation for those affected by land acquisitions.

The new land prices will take effect on October 31 and remain until 2025, replacing the former pricing framework.

The highest rates apply to Đồng Khởi, Lê Lợi, and Nguyễn Huệ streets in downtown District 1, while the lowest are in Cần Giờ District.

District 4 will see reductions of 19-35 per cent, while prices in Thủ Đức City and surrounding districts will rise 1.5 to 11 times, albeit adjusted downward from draft rates.

New prices will affect residential land, agricultural land, and technology park plots, with agricultural land priced between VNĐ400,000 and VNĐ810,000 per square metre.

For technology parks, prices will soar to VNĐ12.2 million per square metre for manufacturing land and VNĐ15.1 million for D1 and D2 streets in Thủ Đức City.

Bùi Xuân Cường, vice chairman of HCM City People’s Committee, said it was important to establish updated pricing structures that are consistent with current market values.

The revised prices would enhance transparency and ensure that compensation is equitable and reflective of prevailing market conditions, he added.

Despite the significant increases, many new rates are lower than those proposed in a draft list from July.

Nguyễn Toàn Thắng, director of the Department of Natural Resources and Environment, said the revised land price table would promote transparency and fairness regarding fees, taxes, and land use charges for both individuals and organisations.

Compensation for land clearance would now be aligned with market prices, ultimately benefiting those impacted, he added.

Đỗ Thị Thu Giang, director of Savills Consulting Services, said Việt Nam has been facing significant discrepancies in land pricing, which have resulted in a “dual pricing” system.

The situation has led to tax evasion and, consequently, substantial financial losses for the state, she added.

Inadequate compensation for land recovery has hindered real estate development, causing delays and disputes during the land acquisition and clearance processes, causing financial challenges for the affected parties, she noted. — VNS