Financial obligations when changing land use purposes are too high

The 2024 Land Law will be amended to issue a 5-year land price list, according to land type, area, location, and accompanied by an annual land price adjustment coefficient.

The above information was given by Mr. Vo Anh Tuan, Deputy Director of the Department of Land Management ( Ministry of Agriculture and Environment ), at the workshop "Improving land laws to create development momentum in the digital age" organized by VietTimes Magazine in collaboration with the Institute of Strategy and Policy on Agriculture and Environment (Ministry of Agriculture and Environment) on August 20.

According to the previous regulations in the 2013 Land Law (which expired on July 31, 2024), the land price list is issued every 5 years. Clause 3, Article 159 of the 2024 Land Law stipulates the land price list as follows: The provincial People's Committee shall develop and submit to the People's Council of the same level for decision on the first land price list for promulgation and application from January 1, 2026. Every year, the provincial People's Committee shall submit to the People's Council of the province for decision on adjustments, amendments, and supplements to the land price list for promulgation and application from January 1 of the following year.

However, many opinions say that having to build an annual land price list and issue it for immediate application from January 1st of the year will waste resources and time. Mr. Vo Anh Tuan also acknowledged this and said that the locality may have to "struggle" to issue an annual land price list.

Therefore, in the draft amendments and supplements to the 2024 Land Law, according to Mr. Tuan, the Provincial People's Council shall decide on the periodic land price list every 5 years, promulgate and apply from January 1 of the first year of the period. In case it is necessary to supplement the land price list during the year, the Provincial People's Committee shall decide.

During the process of organizing the implementation of the land price list, the Government can be flexible and proactive in supplementing cases requiring the application of the land price list; localities can proactively supplement the land price list during the year to meet the actual situation.

Mr. Nguyen Quoc Hiep, Chairman of the Vietnam Association of Construction Contractors (VACC), also emphasized that if the annual land price list is issued, localities will "just worry about making land prices" to issue in time, which is very inappropriate. Mr. Hiep is interested in the plan to issue a 5-year land price list, with an adjustment coefficient. However, he noted that this coefficient needs to be calculated using scientific methods to ensure suitability.

Regarding land prices, compensation and site clearance, Associate Professor, Dr. Nguyen Dinh Tho, Deputy Director of the Institute of Strategy and Policy on Agriculture and Environment (Ministry of Agriculture and Environment) said that land prices according to the price list are often much different from market prices, leading to inadequacies in calculating compensation and attracting investment. This is one of the causes of prolonged disputes and lawsuits. The new Land Law needs to have a mechanism to determine land prices more transparently and realistically, while minimizing delays in compensation and site clearance.

According to Mr. Tho, the Ministry of Finance needs to determine the appropriate coefficient to calculate the financial obligations of the people. This issue is of particular importance, because in reality, there is a huge difference between the market land price and the land price in the State-regulated price frame.

Associate Professor, Dr. Nguyen Dinh Tho cited that in 2011, the highest land price in Hanoi and Ho Chi Minh City was determined at 160 million VND/m². However, by the time of the survey in 2019, the market price in the old Hoan Kiem district in Hanoi had reached about 1.12 billion VND/m², while in some central areas of Ho Chi Minh City, the price was about 1.18 billion VND/m².

At the same time, surveys in other areas also showed that actual land prices ranged from VND780 million to VND820 million per square meter. However, when issuing the 2019 land price framework, the Government considered many factors such as inflation, wage growth rate, per capita income and GDP, so it decided that the adjustment level would not exceed 20% compared to 2011. Therefore, the maximum land price in Hanoi and Ho Chi Minh City was raised to about VND192 million per square meter. This figure is still 5-6 times lower than the actual market price.

"The huge difference between land price frames and market prices has directly affected people and businesses. In fact, in recent times, in Hanoi and Ho Chi Minh City, many households have encountered difficulties in converting land use purposes, because the financial obligations calculated according to the land price list are too high. This also puts pressure on production and business costs, affecting livelihoods and the investment environment," Mr. Tho acknowledged.

Therefore, Mr. Tho emphasized the need to pay special attention to land finance policies, ensuring that people's financial obligations are at a reasonable level, while having a mechanism to support businesses. One of the expected new points is the adjustment of tax debts, ensuring that they do not exceed the payment capacity and are suitable for production and business conditions.

Source: https://nld.com.vn/nghia-vu-tai-chinh-khi-chuyen-muc-dich-su-dung-dat-qua-cao-anh-huong-toi-sinh-ke-196250820145454364.htm