(PLO)- HoREA proposed that the Government apply the method of coefficient K coefficient to calculate land use fees and land rents for all land projects regardless of whether above or below 200 billion VND compared to the land price list.
The Ho Chi Minh City Real Estate Association (HoREA) has just sent a written request to the Government to apply the method of land price adjustment coefficient (K coefficient) to calculate land use fees and land rents for all real estate projects, commercial houses, urban areas, not only limited to land plots, land areas with a value calculated according to the land price in the land price list (BGD) below 200 billion VND.
According to HoREA, the Government’s draft amending and supplementing Decree 44/2014 (hereinafter referred to as the draft) stipulates three methods of land valuation. In which, the K-coefficient method is applied to determine the land price for the case of determining the land price of a land plot or land area under VND 200 billion according to the BOM.
HoREA believes that this method will help the State and businesses predict the amount of land use and land rent paid by the project to the state budget, contributing to ensuring transparency, fairness, and not losing state budget revenue.
However, if it only applies to land plots with a price of less than 200 billion VND compared to the Board of Directors, it is not close to reality. Because of the fact, many real estate projects, commercial houses, urban areas have large scale that the land plot, the land value calculated according to the land price in the Board of Directors is over 200 billion VND. “Even up to thousands of billions of dong in big cities, especially special cities like Hanoi and Ho Chi Minh City”, HoREA said.
Meanwhile, there is currently no suitable land valuation method to apply land valuation for these cases. The reason, in the land valuation methods, the draft only prescribes the K-coefficient method to calculate land use and land rental fees in this case.
Therefore, the Association proposes to apply the land price adjustment coefficient method for all land plots and land plots, regardless of the value below or above 200 billion VND compared with the Board of Directors, HoREA suggested.
In addition, HoREA also suggested that there should be two conditions for projects to apply the K-coefficient method. Specifically, condition 1: The BOM must be built along the route (section) to determine the land price index in the BOM which is the average land price of real estate transactions of the same type performed in an area and in a certain period of time. Or build a land price index by area, which is a land price index determined by legally recognized valuation methods.
Condition 2: It is necessary to build appropriate K coefficients for each area (such as HCMC divided into 5 land price zones); or by type of real estate project (high-end, mid-range, affordable)…
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