HOW TO DETERMINATE EXACT LAND PRICE AND LATEST APPLICATION CONDITIONS

One of the important things in land management and use is determining the land price, because it directly affects the interests of the State, the rights and obligations of land users. So what are the methods of determining land prices?

 METHOD OF DETERMINATION OF LAND PRICE

Land price determination includes 5 popular methods including: Direct comparison method; Extraction method; Income method; Residual method; Land price adjustment coefficient method.

1. Direct comparison method

Is a method of land valuation through analyzing the price of similar vacant land plots in terms of land use purpose, location, profitability, infrastructure condition, area, shape, legality land use rights managers (hereinafter referred to as comparable land parcels) have been transferred on the market, won at auction of land use rights to compare and determine the price of the land plot to be valued.

The direct comparison method is applied to land valuation when there are comparable land plots transferred on the market and won at auction of land use rights.

2. Extraction method

A method of valuing land for land parcels with assets attached to land by subtracting the value of assets attached to land from the total value of real estate (including the value of land and the value of assets attached to land). attached to the land).

The subtraction method is applied to value the land parcel with assets attached to the land in case there are enough data on the prices of real estates (including land and assets attached to land) similar to the land plot. need to determine the price that has been transferred on the market, won the auction of land use rights.

3. Collection method

Is a method of land valuation calculated by the quotient between the average net income earned per year per unit area of ​​land compared with the average annual savings deposit interest rate up to the time of land valuation of the currency. depositing VND with a term of 12 months at a state-owned commercial bank with the highest savings interest rate in the province.

The income method is applied to determine the value of land plots with which incomes and expenses from land use can be determined.

4. Residual Method

Is a method of valuing land for a plot of land with potential for development according to land use planning, construction planning or permission to change land use purpose for the highest and best use by excluding total costs. estimated out of the assumed gross development revenue of the property.

The residual method is used to value a parcel of land with potential for development due to zoning change or land use change when total hypothetical development revenue and estimated total cost have been determined.

5. Land price adjustment coefficient method

Is a method of valuing land by using the land price adjustment coefficient multiplied by (x) the land price in the land price list issued by the Peoples Committees of the provinces and centrally-run cities (hereinafter referred to as the Peoples Committees). province) issued.

The land price adjustment coefficient method is applied to determine land prices for the cases specified in Clause 2, Article 18 of Decree 44/2014/ND-CP.

CONDITIONS FOR APPLICATION OF LAND VALUE METHOD

The conditions for applying the land valuation method are specified in Clause 2, Article 5 of Decree 44/2014/ND-CP as follows:

Direct comparison method

This method is applied to land valuation when there are comparable land plots transferred on the market and won at auction of land use rights.

Extraction method

This method is applied to the valuation of land parcels with assets attached to land in case there is enough data on the prices of real estates (including land and assets attached to land) similar to the required land plot. price transferred on the market, won the auction of land use rights.

Income method

This method is applied to the valuation of land plots with which incomes and expenses from land use can be determined.

Residual method

This method is applied to the valuation of land plots with potential for development due to zoning changes or land use change when the total hypothetical development revenue and estimated total cost are determined.

Land price adjustment coefficient method

This method is applied to land valuation for the following cases:

- Determining the land price to serve as a basis for calculating land rent when the State leases land with annual rental payment, but the land rental unit price must be re-determined to adjust for the next cycle.

- Determination of land price as a basis for determining the starting price of land use right auction when the State leases land with annual rental payment.

- Calculation of compensation when the State recovers land for projects with adjacent land parcels with the same use purpose, profitability and income from similar land use, or the case in the same area. The land acquisition area does not meet the information requirements for applying other land valuation methods.

Notes when applying land valuation method:

– Based on the conditions of application of land valuation methods and collected information to select an appropriate land valuation method.

- In case of necessity, a combination of methods (direct comparison method, deduction method, income method, surplus method) can be applied to check, compare, contrast and decide on prices soil.