A notable point in this draft is the proposal to apply a K coefficient of 1 to two groups of cases.
The first group includes individuals and households applying for land-use purpose conversion, being allocated land without auction, or having their land-use rights recognized by the State beyond the prescribed limits.
The second group includes enterprises and economic organizations that are allocated land by the State with land-use fees collected, leased land with annual rental payments or a one-off payment for the entire lease term, or converted from land lease to land allocation.
Mr. Dao Quang Duong, Head of the Land Economy Division under the Ho Chi Minh City Department of Agriculture and Environment, said that in reality, the process of developing land policies in the city shows that there are three groups of subjects directly affected, each with different expectations regarding land prices.
Accordingly, the group whose land is subject to acquisition often expects land prices to be determined at a high level to ensure compensation benefits. The group converting land-use purposes, mainly households and individuals seeking to legalize their housing, prefers lower land prices to reduce financial burdens. Meanwhile, the group leasing land with annual rental payments, including manufacturing, industrial, and agricultural enterprises, needs low and stable land prices to maintain competitiveness.
This contradiction puts management agencies in a difficult position, as one group demands higher prices while another needs lower prices. Ho Chi Minh City, with a population of 14 million people, has a very high demand for land-use purpose conversion, along with 164 site clearance projects affecting tens of thousands of households. If the policy is not balanced, the risk of complaints, lawsuits, and economic stagnation will be very high, Mr. Duong analyzed.
According to Mr. Dao Quang Duong, the proposal to apply a K coefficient of 1 to the two aforementioned groups is a solution aimed at stabilizing people’s lives, especially by helping them establish new housing and reduce financial pressure when converting land-use purposes for residential construction. For businesses, this coefficient contributes to enhancing competitiveness through reasonable input costs, thereby improving the investment environment.
What is the K coefficient?
According to Resolution No. 254/2025/QH15 of the National Assembly, the Land Price Adjustment Coefficient (K coefficient) is the rate of increase or decrease in land prices for corresponding types of land in areas and locations specified in the land price tables.
The K coefficient is used together with land price tables to calculate land-use fees and land rental payments when the State allocates land, leases land, permits land-use purpose conversion, or recognizes land-use rights; determine starting prices for land-use rights auctions; calculate taxes, fees and charges related to land use; calculate fines for administrative violations in the land sector; determine the value of land-use rights during the equitization of state-owned enterprises; implement land users’ rights and obligations toward the State; and determine compensation when the State recovers land.
In cases where land is allocated or leased for the implementation of sea reclamation investment projects, projects containing sea reclamation components, or cases where land price tables cannot be applied, specific land prices shall be determined in accordance with the provisions of the Land Law.
Depending on the type of land, the subjects and forms of land use, land areas and locations, and land-use coefficients, the land price adjustment coefficient will be applied accordingly.
