Hanoi (VNA) ⭕– The draft revised Land Law has abolished the land price table and shifted the approach from prices fixed by authorities to prices based on the market. However, the problem is whether this new rule can control the issues that may emerge among parties during land transactions once it is enforced.

Given this, many experts held that the draft revised Land Law should be supplemented with regulations helping with the property market’s healthy development, especially helping to promote transparency of prices, mechanisms, and policies to prevent land manipulation and speculation.

Bidding should be compulsory

At a meeting held on February 21 to collect opinions from organisations and economists on the draft revised Land Law, talking about the use of land to carry out investment projects through the negotiation of the land use right, Ngo Sach Thuc, former Vice President of the Vietnam Fatherland Front Central Committee, said that this is an important issue over which the principles and the State management must be guaranteed to ensure consistency, equality, and harmonious interests and boost land use effectiveness. He cited the Party Central Committee’s Resolution 18-NQ/TW as stating that the hand-over and leasing of land must be conducted mainly via the auction of the land use rights and the invitation of tenders for land-use projects. This consistent policy must be carried out persistently to address existing major shortcomings and problems. A review of the 10-year enforcement of the Land Law revealed shortcomings, Thuc noted. He said that the interests of the State, people and businesses in urban and social housing projects haven’t yet been harmonised. Compensation levels for revoked land are too low, and public land is converted into private interests through the equitisation and transfer of State assets without fully accounting for the value of the land use right. Corruption and negative phenomena are refite, and there is a high rate of land-related complaints, denunciations and petitions (65% - 90% of all cases), he said. Therefore, if the draft permits two compensation mechanisms in a single project, complicated issues will continue. Instead, those who have demand have to access commercial land via auctions or trading platforms, he opined.

Land prices should vary according to locations

Expressing this viewpoint, Dr Nguyen Huu Dung from the National Economics University said the abolition of the land price table means there will be no maximum and minimum price framework for each type of land, but land prices will vary according to location. With this change, the provincial-level People’s Committees will base on land valuation principles and methods, along with land price fluctuations in the market, to determine prices of land in each location. After land prices are determined based on that method, they will be submitted to the provincial-level People’s Councils for approval by the provincial-level People’s Committees. What remains unclear is whether the new rule is stringent enough to control issues that may emerge among parties during land transactions once it is enforced, Dung said. In fact, the draft revised Land Law still includes the land price table in another form, and the table is updated annually. This is a new forward development as the table will be updated. However, it is not a truly breakthrough solution since this valuation method alone is unable to thoroughly deal with problems, he went on. Dung added that to bring land prices close to real values in the market, legal regulations need to enable the establishment of an independent land valuation body. This unit would assist with the building of the land price table as per the land location and make adjustments when necessary depending the region./.