The government says official land prices in urban areas are 40 to 70 percent lower than market value, admitting that the current pricing system is out of date with reality.
The highest official land prices, which are mainly used for tax purposes and site clearance compensation, are set at VND81 million per square meter, applied to some districts in Hanoi and Ho Chi Minh City, according to a report sent to legislators this week. The maxium rate has been left unchanged since last year.
Only a few among 63 cities and provinces in the country hire consultants to help do their land pricing. Some provinces continued to keep a very wide price range for a certain area, leading to inconsistent, arbitrary decisions in different cases, the report said.
Vietnam now allows provincial authorities to set land valuations every year. The valuations, however, have to be based on a price frame introduced by the central government and are not allowed to exceed the frame's maximum limit by 20 percent.
The Ministry of Finance earlier this year recommended that the government give each city and province more autonomy in deciding land prices, freeing them from the old system.
The government said in the new report that one of the priorities in the remaining months of 2012 is to introduce a new pricing system for next year.
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