A groundbreaking breakthrough in thinking in land management

According to the provisions of the Land Law, the Government issues a land price framework every 5 years for each type of land, according to each region. During the implementation of the land price framework, if the market price increases or decreases by 20% or more compared to the land price framework, the Government will adjust the land price framework accordingly. Localities must base their land price lists on this framework.

This regulation is considered by many experts to be the reason why the land price list established by localities is not close to the actual transaction price on the market, causing loss of financial resources for the State budget when allocating land to organizations and individuals for use, and is a factor leading to prolonged disputes and complaints from people when the State reclaims land, causing damage to people, businesses and the State.

Prof. Dr. Hoang Van Cuong - Vice President of the National Economics University, Member of the National Assembly's Finance Committee, said that recently, there have been many negative corruption cases related to land, the root cause of which is low land prices, causing many individuals to profit when the State allocates land with land use fees to private individuals.

Prof. Dr. Hoang Van Cuong - Vice President of National Economics University.

According to Professor Dang Hung Vo - former Deputy Minister of Natural Resources and Environment, the current high land prices are due to land hoarding and speculation.

“Many people get rich by speculating on land and housing. If we cannot change the current situation, it will be difficult for Vietnam to become a high-income country by 2045 as the target,” said Mr. Dang Hung Vo.

Professor Dang Hung Vo - former Deputy Minister of Natural Resources and Environment.

At the 5th Conference, the Party Central Committee (VIII tenure) issued Resolution No. 18/2022. In order to perfect the land price determination mechanism in the coming period, Resolution 18 sets out a notable solution: abolishing the land price framework but continuing to use the land price table mechanism, building a land price table based on market principles.

Localities must have a method to determine the most appropriate price list compared to market prices. Thus, when implementing land economic policies such as compensation and site clearance, people will enjoy more satisfactory compensation policies.

Prof. Dr. Hoang Van Cuong believes that this is a breakthrough in thinking. Mr. Cuong analyzed that previously, implementing the price framework was an imposition by the State, using market tools to build policies. If we can do as proposed in Resolution 18 of the Central Committee, we will have successfully implemented the socialist-oriented market economy model. The State will use market tools to regulate behavior and interests and will no longer use its administrative orders to impose and there will be no more situation of "forcing" people to hand over land or giving someone the right to enjoy a huge profit from land, thereby eliminating the situation of asking - giving and corruption from land.

Economist, Associate Professor, Dr. Dinh Trong Thinh also said: Abolishing the land price framework and bringing the real estate market to a market mechanism will help Vietnam have more revenue streams from taxes on real estate transactions. Along with that, it will limit speculation and corruption in land, people will benefit when receiving compensation from land, and increase budget revenue when taxes on land use rights transfer, land lease, etc. increase./.