VIETNAM, October 17 – Compiled by Thu Hà
HÀ NỘI — The revised land bill, which will be on the agenda of the National Assembly meeting for the first time this month, is receiving a lot of public attention as it will remove the government’s land price framework to ensure price market principles.
The change should contribute significantly to the development of the real estate market and the economy.
Currently, the land price framework is promulgated by the government every five years. Based on this framework, local people’s committees establish their own price schedules for calculating tax payments or calculating a land price for project clearance compensation.
However, as the last revision of the law was made in 2013, the land price range is currently too low compared to the price exchanged directly on the market between the seller and the buyer. The actual market price is always much higher than the establishment prices of local people’s committees.
According to Dr. Nguyễn Đình Thọ, Director General of the Institute of Strategy and Policy of Natural Resources and Environment, the land law of 2013 stipulates that the price of land within the framework must be equal to the market price, but in fact, it is much higher. lower. The current framework of land prices in most localities is 30-60% below market price.
Professor Đặng Hùng Võ, former Deputy Minister of Natural Resources and Environment, said the wide discrepancy between the two types of land prices has caused disputes, lawsuits, corruption and chaos in the market immovable.
Việt Nam’s land market has long existed as a dual price mechanism, so the revised law is expected to remove the price gap.
To address the shortcomings, the land law revision project removes the government land price framework. This means that the government will no longer apply minimum and maximum prices for each type of land. Instead, when issuing the land price list of each locality, the Provincial People’s Committee will use land pricing methods, land prices and standards, as well as fluctuations in actual land prices on the market to establish the price list.
After completing the construction of the land price list, it will be submitted to the provincial people’s councils for approval.
The most serious consequence of the discrepancy between the two types of land prices is corruption, Võ noted, adding that this is one of the loopholes leading to the loss of state budget revenue. Moreover, brokers have used the adjustment of the land price framework to spread false information, inflate prices and create a virtual fever. Removing the land price framework would be a breakthrough in bringing the price back to its real value and preventing land corruption.
According to Troy Griffiths, Deputy Managing Director of Savills Vietnam, land law is always a sensitive and complicated issue in the legal system of any country in the world. This amendment is expected to change land valuation from an outdated price range to another method consistent with market principles. The change is all the more important as it will help attract investors and develop the real estate market and the economy.
Prime Minister Phạm Minh Chính and Secretary General Nguyễn Phú Trọng have recently raised concerns about delays in the development of public projects. In the post-COVID-19 period, infrastructure spending is needed to spur economic recovery, but work has remained slow, mainly due to difficulties in clearing and allocating land in the wake of the disaster. significant discrepancy between the land market price and the government’s land price framework. The land assessment amendments under the land bill are very important to expedite the work.
Griffiths said that under land allocation, the compensation process was simply calculated based on the government’s land price range, but the measure sometimes resulted in inadequate compensation and many additional costs, causing delays in project development plans.
Under the revised law, owners of acquired real estate will receive a more reasonable compensation value closer to the market price, which will help speed up the process of compensation and allocation of land to build new projects.
Griffiths hopes the amended land law will help the real estate market become more transparent. All land that needs to be cleared or compensated will be valued at market prices. The change will create more confidence for investors and people besides helping the state to have more revenue as the land is fully taxed.
Sharing the same view, Professor Thọ said that when the economy is opened up, oil and gas is the financial source that brings stability to the state budget. In recent years, revenue from annual land use has replaced oil and gas as the main source of revenue. About 15-16% of the state budget came from the collection of a land use tax of US$12.9 billion.
But this number was still not significant in relation to the capacity that land resources could bring to the country and the people. The conversion of agricultural land for non-agricultural purposes, or other types of land to residential land, had brought great value. The property tax difference would be reallocated to the state, individuals and businesses, ensuring the harmony of interests between them. It could also create a balance between the generations of today and tomorrow, ensuring that future generations still have land to work on.
According to the law firm ASL, the change in the method of determining the price range of land will also help to deal with the real estate crisis in Việt Nam as it can prevent or delay the possibility of a possible real estate bubble. —VNS