The draft revised Land Law has just been announced by the Ministry of Agriculture and Environment for comments until the end of August 10. In the submission, the Ministry said that after nearly two years of implementation, the 2024 Land Law still has some limitations, and it is necessary to continue to study and improve policies to unlock land resources to serve socio-economic development.
According to the Ministry of Agriculture and Environment, the domestic real estate market still contains many unstable factors such as speculation, "land fever", and high land prices not suitable for real value. These fluctuations not only affect the macroeconomy but also directly affect the development and implementation of land policies. Therefore, it is necessary to continue to improve the land valuation mechanism and have effective regulatory tools to control the market.
Accordingly, the draft revised Land Law proposes to remove the principle of land valuation according to market principles when determining land prices, in order to promote the role of the State in deciding land prices; and at the same time stipulate methods of land valuation in a scientific and public direction.
The draft also proposes to remove regulations on specific land prices. Instead, regulations on land price tables, land price adjustment coefficients, rates for calculating land use fees and land rent for each type of land according to subjects and forms of land use; compensation rates; infrastructure construction costs determined according to the provisions of construction law will be the basis for calculating land use fees and land rent; compensation when the State recovers land; determining the starting price for auctioning land use rights; calculating taxes, fees, and charges related to land use; calculating penalties for administrative violations in the field of land; determining the value of land use rights when equitizing state-owned enterprises; exercising the rights and obligations of land users to the State and compensating when the State recovers land.
According to the Ministry of Agriculture and Environment, this amendment is aimed at avoiding the situation of manipulating land prices, not allowing the formation of a multi-level price mechanism.
The draft also stipulates uniform authority to decide, amend, and supplement land price lists and land price adjustment coefficients under the Provincial People's Council, thereby enhancing the role and responsibility of this agency in deciding land prices.
In addition, the draft proposes to abolish regulations on land price determination consulting and conditions for practicing land price determination consulting to enhance the responsibility of state management agencies and public non-business units in building land price tables, land price adjustment coefficients, and at the same time reduce business conditions.
Notably, the draft supplements financial policies on land and taxes to regulate land rent differences; manage and reasonably regulate the added value from land due to planning, infrastructure investment, land use purpose conversion, urban space expansion to combat group interests, corruption, and negativity; create resources to modernize priority infrastructure, renovate and embellish urban areas, develop policy housing and social security, ensuring harmony of interests between the State, people, investors and the community.
At the same time, the draft also proposes to regulate land rent differences for surpluses in real estate business and apply high tax policies to abandoned land, short-term trading activities to effectively use land resources, combat wastefulness, sanitize the real estate market and limit speculation.
In addition, the draft specifies the functions, tasks and responsibilities of agencies determining, appraising, and deciding land prices according to the principle that the Central Government develops framework criteria, principles, methods and mechanisms for inspection and supervision, while localities decide land prices.
The Ministry of Agriculture and Environment affirmed that land prices decided by the State will be built on a basis of complete, scientific, public data and reasonably reflect market reality. At the same time, this price level will be connected to land, tax, notarization and banking data to limit price manipulation and not to form a multi-level price mechanism.
