In Vietnam, land is a property that is most valuable. Land is an exciting investment field with real estate projects. The real estate business is governed by land prices. To ensure the stability of land prices, the land price adjustment coefficient was established. So about the matter “What is the land price adjustment coefficient under Vietnam law?” Let’s find out with LSX in the article below.
Legal grounds
- Land Law 2013
- Decree 44/2014/ND-CP
What is the land price adjustment coefficient under Vietnam law?
Under Land Law 2013, the land price adjustment coefficient (also known as the K coefficient) is the coefficient used to calculate the specific land price on the basis of the common land price in the market, the local socio-economic conditions and the land price list. promulgated by the People’s Committee of the province or city.
For example: The land price list is 1 million VND/m2, if the land price adjustment coefficient when the State recovers is decided by the provincial People’s Committee is 1.5, then the specific land price to calculate the compensation price is 1.5 million VND/m2.
* Responsibility for building land price adjustment coefficient
Depending on each case, the specialized agency under the People’s Committee of the province responsible for formulating the land price adjustment coefficient belongs to the Department of Finance or the Department of Natural Resources and Environment (presiding over and coordinating with other relevant departments). , relevant branches to develop and submit to the People’s Committee of the province for decision.
* Authority to decide land price adjustment coefficient
Provincial People’s Committees shall prescribe and decide on land price adjustment coefficients to determine specific land prices on the basis of common land prices in the market, local socio-economic conditions and land price lists. Clause 1, Article 18 of Decree 44/2014/ND-CP).
When to apply the adjustment factor?
Pursuant to Clause 2, Article 18 of Decree 44/2014/ND-CP, the land price adjustment coefficient used to calculate the specific land price by the land price adjustment coefficient method applies to the following cases:
(1) The cases specified at Points a, b, c and d, Clause 4, Article 114, Clause 2, Article 172 and Clause 3, Article 189 of the Land Law 2013 where the land plot or land area of the project is valued (calculated according to land price in the land price list) less than 30 billion VND for cities directly under the central government; less than 10 billion VND for mountainous and highland provinces; less than 20 billion VND for the remaining provinces, specifically:
– Calculating land use fees when the State recognizes the land use rights of individuals and households for the excess residential land area; permit the change of land use purpose from agricultural land, non-agricultural land that is not residential land to residential land for the area exceeding the quota of residential land allocation to individuals and households. Calculation of land rent for agricultural land in excess of the land allocation quota, exceeding the quota for receiving the transfer of agricultural land use rights of households and individuals (point a, clause 4, Article 114 of the 2013 Land Law).
– Calculating land use levy when the State allocates land with collection of use levy without auction; recognition of land use rights, permitting change of land use purpose for organizations that must pay use fees (point b, clause 4, Article 114 of the 2013 Land Law).
– Calculation of land rent in case the State leases land without auction (point c, clause 4, Article 114 of the 2013 Land Law).
– Calculation of the value of land use rights upon equitization of a state-owned enterprise in which the land-use joint-stock enterprise falls into the case where the State allocates land with collection of use levy, leases land with one-off rental payment for the entire period rent; land rent calculation in case equitized state enterprises are leased by the State with annual rental payment (point d, clause 4, Article 114 of the 2013 Land Law).
– Economic organizations, self-financed public non-business organizations, individuals, households, overseas Vietnamese, foreign-invested enterprises that are being leased land with payment by the State the annual land lease shall be converted to land lease with one-off payment of land rent for the entire lease period and the specific land price must be re-determined to calculate the land rent at the time of issuance of a decision permitting the change to land lease in the form of payment one-time land rental for the entire rental period as prescribed (Clause 2, Article 172 of the 2013 Land Law).
(2) For the case of land lease with annual payment, the land rental unit must be re-determined to adjust for the next cycle.
(3) Calculating the starting price for auctioning land use rights when the State leases land with annual rental payment.
4) Calculation of compensation when the State recovers land for projects with adjacent land plots, having the same use purpose, profitability and income from similar land use.
Note:
– Every year, the People’s Committees of the provinces and cities stipulate the adjustment coefficient to apply for cases (1), (2), (3).
– The People’s Committees of the provinces and cities shall decide the adjustment coefficient to apply to each project at the time the State decides to recover the land in case (4).
In addition, the decisions on the land price adjustment coefficient for each year of the provinces and cities also specify the case of applying the land price adjustment coefficient (should see details in each local document). direction).
In summary, the land price adjustment coefficient is very important because the land price list issued by the People’s Committees of the provinces and cities is applied stably over a period of 5 years, except for the case of amendments and supplements. Particularly for cases where it is necessary to calculate the land price that is higher or lower than the land price list, there must be a land price adjustment coefficient such as compensation for ground clearance, calculation of money for exceeding the land use limit, etc.
The land price adjustment coefficient is applied to which types of land?
Currently, the land price adjustment coefficient is used as a basis for calculating land prices for the following types of land:
– Non-agricultural production and business land;
– Commercial and service land;
– Agricultural land, forestry land, land with water surface for aquaculture for agricultural production;
– Land with which the State has recognized the land use right or permitted to change the land use purpose for each household or individual;
– Land allocated or leased by the State;
– The project’s land area has a value (according to the land price in the land price list) of less than VND 30 billion for cities directly under the Central Government; less than 10 billion VND for mountainous and highland provinces; less than 20 billion VND for the remaining provinces; for the case of land lease with annual payment, the land rental unit price must be re-determined for adjustment for the next cycle; starting price for auctioning land use rights when the State leases land with annual rental payment;
– The project has adjacent land plots with the same use purpose, profitability and income from similar land use.
The process of determining the land price adjustment coefficient
The order and contents of land price determination by the land price adjustment coefficient method shall comply with the following regulations:
– Survey, collect information
+ Survey and collect information on land prices of at least 03 land plots transferred on the market and won at auction of land use rights within a period of no more than 2 years up to the time of valuation at each land location. (according to the land price list) in the land valuation area.
If there is not enough information on land prices in the area of land valuation, information shall be collected in neighboring areas with similar conditions on natural, socio-economic, technical and infrastructure infrastructure. social strata with land valuation area.
+ For the case where the income and expenses from the land use can be determined, the income and expenses from the land use of at least 03 land plots are collected to determine the land price according to the law. method of income at each land location (according to the land price list) in the land valuation area.
+ Collect information on socio-economic conditions in the locality.
– Determine the common land price in the market for each land location
+ Statistics of market land prices according to each land location for the collected information
+ Determine the common land price in the market for each land location. The common land price on the market is the price that appears with the most frequency in the transferred transactions on the market, winning the auction of land use rights, the land price determined from the expenses and income of the land plots. have the same purpose of use in a certain area and for a certain period of time.
For the case where the market price of land is concentrated on a price range, the prevailing market price of each land location is determined by taking the arithmetic average of the land prices at that land location.
– Determine the land price adjustment coefficient
The land price adjustment coefficient is determined based on the common land price in the market, specific socio-economic conditions in the locality and the land price in the land price list. In case there is not enough information on the market land price to determine the common land price on the market, based on the specific socio-economic conditions in the locality, the specific land price has been approved by the competent decision-making authority, land price in the land price list to build the land price adjustment coefficient.
The prescribed land price adjustment coefficient is established for each type of land and land location according to the project; for the case where the area has many land acquisition projects at the same time and has similar characteristics in terms of natural, socio-economic, technical and social infrastructure, the system will The land price adjustment number is developed for each type of land and location of land by area.
– Determine the land price of the land plot to be valued
Land price of the land plot to be valued = Land price in the land price list x Land price adjustment coefficient
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Please see more
- Procedure of land acquisition for project implementation in Vietnam
- Regulations on service land in Vietnam
- Forms of business in land use rights in Vietnam
Frequently asked questions
Provincial-level People’s Committees have the right to stipulate the land price adjustment coefficient of a number of locations higher or lower than the average threshold for calculating the land use levy fee if that location has a high density of construction, public works height, etc. process, land use coefficient is different from the general average of the area, the route containing that location. If the People’s Committee of the province does not issue a new land price adjustment coefficient in a year, people can use the land price adjustment coefficient in the previous year to calculate the land price.
Step 1: Survey information about actual land prices
Step 2: Determine the common land price in each location and area
Step 3: Determine the land price adjustment coefficient
Step 4: Calculate the land price of the area according to the coefficient K
Based on the common land price in the market as well as specific socio-economic conditions in the locality and the land price specified in the land price list, the land price adjustment coefficient is determined. In case there is not enough information on the market land price to determine the common land price in the market, it will be based on the specific socio-economic conditions in the locality, the specific land price already approved by the competent authority. decision-making authority, land price in the land price list to build the land price adjustment coefficient.
The land price adjustment coefficient specified at Point b, Clause 2, Article 18 of Decree No. 44/2014/ND-CP is established for each type of land and land location according to the project. In case the area has many land acquisition projects at the same time and has similar characteristics in terms of natural, socio-economic, technical and social infrastructure, the coefficient land price adjustment is made for each type of land, land location according to region.
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