Lawyer, Master Pham Thanh Tuan - Hanoi Bar Association, real estate legal expert - commented that according to the provisions of Point e, Clause 1, Article 160 of the 2024 Land Law, when the State reclaims land from land users, the compensation price is determined according to "specific land price". This regulation has basically ensured a relatively appropriate land valuation when reclaiming, contributing to limiting the situation of complaints and lawsuits since the 2024 Land Law was implemented.
The 2024 Land Law Draft amends and supplements Article 160 in the direction of removing regulations on specific land prices, instead stipulating that the land price adjustment coefficient is the rate of increase or decrease in price of each type of land, corresponding to the area and location determined in the land price list. The land price adjustment coefficient is issued by the provincial People's Committee and applied from January 1 every year; if necessary, it can be adjusted within the year or for each specific area.
According to the new viewpoint, land prices are decided by the State and do not depend on the appraisal results of the consulting organization, thereby becoming a tool for the State to orient, adjust, and stabilize the land market, while promoting production and business development.
Currently, the Draft Law on Land 2024 (amended) stipulates: "2a. The basis for calculating compensation when the State reclaims land includes: Land area reclaimed; Land use term; Land price according to the land price list and land price adjustment coefficient; Purpose and form of land use".
The removal of the regulation on applying specific land prices has been applied continuously since 2006, although it may be appropriate in determining land prices for enterprises ( Helping reduce financial obligations on land use fees that enterprises must pay), but it leads to disadvantages for people whose land is recovered. Accordingly, the compensation amount according to the land price list and land price adjustment coefficient is often significantly lower than the calculation method according to specific land prices such as the 2024 Land Law, which can easily lead to complaints from people when the State reclaims land.
When the gap between compensation and market prices is too large, people can easily feel disadvantaged, leading to increased complaints and lawsuits, and creating pressure on local authorities in site clearance. On the other hand, prolonged disputes can cause project progress to be delayed, causing administrative and legal costs, while reducing land use efficiency and wasting resources.
In other words, although the new calculation method has the advantage of simplifying management, if compensation is not adjusted appropriately, it will have many negative consequences for the economy and society and reduce people's trust.
To solve the above problems, promote the smooth implementation of projects while still ensuring social security factors, specific solutions can be considered.
Option 1 is to keep or combine the "specific land price" mechanism in compensation. Accordingly, continue to apply specific land prices to compensation cases for households and individuals whose land is recovered, because this is a group directly affected and is at risk of high-risk lawsuits. Only apply the land price list multiplied by the adjustment coefficient for enterprises, projects or cases of calculating financial obligations that are not directly related to compensation and resettlement.
Option 2 is to establish a flexible adjustment coefficient mechanism. In case the current mechanism for determining "specific land prices" is completely abolished, it is necessary to supplement regulations on "additional land price adjustment coefficient" specifically for compensation, with a level that can be higher than the coefficient applied to the financial obligations of the enterprise. Allow the Provincial People's Committee to decide on the level or percentage of the "additional land price adjustment coefficient" based on the market price of each area, ensuring compensation prices close to reality.
If this option is applied, the land price for calculating land use fees for enterprises and individuals when the State allocates land, leases land, or permits change of land use purpose will be calculated by: Land Price List × Land Price Adjustment Coefficient. Meanwhile, the compensation land price for people whose land is recovered will be calculated by: Land price list × Land price adjustment coefficient × Additional land price adjustment coefficient.
According to Lawyer Pham Thanh Tuan, only by ensuring a harmonious mechanism of interests between the State, businesses and people can compensation and site clearance work be effective, contributing to social stability, ensuring social security and promoting economic development.
