Real estate development in downtown HCM City. Higher agricultural land prices are expected to better reflect market rates and ease conversion costs for households converting farmland to residential use. — VNS Photo Bồ Xuân Hiệp

HCM CITY — Agricultural land prices in HCM City could rise by up to 85 per cent under a new draft land-price framework expected to take effect in 2026, marking one of the city’s most significant adjustments in years.

According to the draft released for public consultation by the Department of Agriculture and Environment, the highest proposed price for agricultural land ranges from VNĐ1.2 million to VNĐ1.4 million per cubic metre, sharply higher than the current ceiling of VNĐ810,000 per cubic metre set under Decision 79.

Officials say the adjustment aims to narrow the longstanding gap between agricultural and residential land values, which has created complications in compensation, resettlement, and land-use conversion for households and individual landowners.

Under the proposal, agricultural land prices are divided into four geographic zones and three positional tiers based on distance from the roadside.

Long-term crop land would reach VNĐ1.4 million per cubic metre in Zone 1, VNĐ1.2 million per cubic metre in Zone 2, VNĐ840,000 per cubic metre in Zone 3, and VNĐ580,000 per cubic metre in Zone 4, with lower prices applied to plots farther from roads.

Annual cropland, including rice, would have a maximum of VNĐ1.2 million per cubic metre in Zone 1, VNĐ1 million per cubic metre in Zone 2, VNĐ700,000 per cubic metre in Zone 3, and VNĐ480,000 per cubic metre in Zone 4.

Compared with current levels, long-term cropland in Zone 1 would increase by 73-78 per cent, while annual cropland in the same zone would jump nearly 85 per cent, the steepest rise among all categories.

Consultants involved in drafting the proposal said the updated values were calibrated at roughly 20 per cent of actual market transfer prices, aiming to create a more realistic benchmark while maintaining fairness across districts.

The gap between official land-price tables and real compensation rates has become increasingly stark: in the former Thủ Đức City area, official prices peak at just over VNĐ800,000 per cubic metre, while actual compensation has reportedly reached VNĐ9 million per cubic metre; in Củ Chi outlying area, official rates top out at VNĐ600,000 per cubic metre compared with compensation of VNĐ3 million per cubic metre.

Authorities say raising agricultural land prices would help better align compensation with market reality and reduce the financial burden on households converting agricultural land to residential use.

Under current rules, land-use conversion fees are calculated as: conversion fee equals the residential land price minus the agricultural land price, multiplied by the area being converted.

With agricultural land in the former Thủ Đức City area currently valued at VNĐ650,000 per cubic metre, the proposed increase to VNĐ1.2 million per cubic metre, while residential-land prices remain mostly unchanged, would substantially lower conversion costs for families.

The new land-price framework, expected to apply from January 1, 2026, will form the basis for calculating land-use fees, land-lease payments, land-use taxes, income tax from land transfers, administrative fees, and starting prices for land-use rights auctions.

It is expected to have wide-ranging implications for real-estate transactions, compensation policies, and state-owned housing.

Public consultation on the draft is under way, with final approval anticipated later this year. — VNS