Breakthrough in land policy: increase expropriation, remove “withdrawal”

Mr. Nguyen Quang Dong, Director of the Institute for Policy Research and Communication Development (IPS), said that the core thinking when amending the Land Law is to design policies to have an effective land market and true commodity market. Accordingly, the State needs to ‘purchase’ land for a project for public purposes; abolishing ‘recovery’ and ‘land allocation’ with land use conversion projects and allowing people and businesses to transact through civil channels. The rights to land assets have not been guaranteed, as reflected in the fact that the Government The State uses the right of recovery, ie, to take the land (mainly agricultural land) of this subject, then hand it over to another subject without trading or negotiation. The draft law stipulates that the State will recover land. In which case to implement the project?

All conflicts stem from land acquisition

Reporter: In your opinion, what are the important issues raised when amending the Land Law this time?

– Mr. Nguyen Quang Dong: In my opinion, land should be approached from two angles: both as a resource and as an asset.

From a resource perspective, land is an important resource of the nation, the State through policy tools such as planning, land finance, administrative management, etc., so that land can be used most effectively.

Approaching from the perspective of property, we will see that, although it is owned by the whole people, in fact land property belongs to both groups: public and private. Public, i.e. public land, offices, public works… – is the property of the State. Private property, i.e. land that has been granted the right to use for individuals or households; Community and collective land such as family land, community forest land, etc. Approaching land from the perspective of property refers to the property rights of people, businesses, or organizations on each plot, or lot of land.

Looking back over the past, it can be seen that the efficiency of land use is low; and property rights are not guaranteed.

Reporter: Why do you say property rights are not guaranteed, sir?

– The right to land property has not been guaranteed, reflected in the State’s use of the right to recover, i.e. take the land (mainly agricultural land) of this subject, then hand it over to another subject without through sales and negotiations. This disrupts the market nature of asset trading – that is, buy and sell; Prices are determined by the market by supply and demand. In other words, some groups of individuals and businesses have “borrowed” the State to stand out to recover land to “take” other people’s “land assets” at a cheaper price than the market.

This approach has many serious consequences. Firstly, the people who were taken over the land were disgruntled and angry. Land, especially agricultural land, is cheaply acquired; Businesses only need to split lots – sell the background to easily earn super profits. The second consequence is low land use efficiency. Land acquired for projects is likely to fall into the hands of businesses that are close to the government – ​​not businesses that need land and have the ability to use the land with the highest economic efficiency. The situation of setting up a project to acquire land through “relationship” with the government and then selling it to the project is a typical consequence of this approach. The third consequence is to degrade the leadership team, local cadres and civil servants. By setting up a project, then acquiring land, in order to “do it quickly” and “make it easy” it is often necessary to have friendly relations, hook up, and bribe officials and civil servants. Budget loss; cadres “broken”; people lose faith.

Reporter: Is that why you often emphasize land acquisition as the core issue of land policy in this revision of the law?

– That’s right! It is not difficult to see that, in the past, conflicts between people and authorities due to the local government’s claim of land and inadequate compensation are the biggest source of land disputes, accumulating many frustrations and social unrest. Cases, from Thu Thiem (HCMC); to Van Giang (Hung Yen), Duong Noi (Hanoi)… all originated from the government’s withdrawal of agricultural land and then handing it over to businesses.

In the upcoming medium-term development period in Vietnam, the demand for land concentration is still very large for four main target groups: (1) land for urbanization (residential land, urban projects, commercial projects); (2) land for industrial zone; (3) land for infrastructure works (traffic is the largest); and (4) land accumulation for large-scale agricultural projects. The land fund for these four groups is mostly from the agricultural land fund.

Amendment of the Land Law should aim at turning the land market into a true commodity market, specifically, land (mainly agricultural land) converted into resources for the four main target groups mentioned above. through the way of buying, selling and trading properties. Thus, the subject who wants to “buy land” must go through the civil mechanism, that is, negotiate with the land owner in the form of a purchase and sale agreement. The state authenticates the transaction and collects the property transfer tax. No longer withdrawing and re-allocating land use rights as current.

Convenience of buying and selling must be the main way

Reporter: Specifically, businesses need land to do projects, the State needs land for construction, how to do it, according to you?

– Enterprises who want to do projects in urban areas, industrial zones, etc. on agricultural land, they will meet farmers to buy back the land. The State stands out to authenticate transactions; Farmers pay taxes on the income earned through the transfer of property to the State. It is in the state’s interest to collect taxes. Because of the agreement to buy and sell, there will be no more pressing matters. There will be no price bracket for this civil market, the only thing the State cares about is that the parties pay enough taxes and do not evade taxes.

Further, project developers need to comply with land use planning and construction standards. The role of the State here is to make planning, that is, to orient the development of territorial space. This place is currently agricultural land, but the planning is prioritized as an industrial park or an urban area, when the enterprise’s project meets the planning conditions and meets the construction standards, it will be licensed to do so.

In short, the land the enterprise buys from the people, and when doing the project, the enterprise must comply with the standards of the State, must have roads, electricity, and water; then what is the construction rate? If it is enough, let’s do it, if it’s not enough, it’s okay.

Reporter: What about infrastructure projects and public works of the State?

The State must expropriate the land from the people in order to have a land fund. In the condition that it is necessary to prioritize infrastructure projects quickly, in my opinion, there may be a land price bracket for this project, and that price bracket may not be close to the market. I think, people will also happily negotiate and suffer a little bit if the project is a project for public purposes, building roads, building schools, building hospitals, parks…

Reporter: If so, will there be no more “recovery” and “land allocation”?

– That’s right! Once a market, already a “property” and the supreme purpose of the State is to protect legal property, there is no “recovery” of this person to give to others.

The success of Vietnam’s economic development is a return to the market economy. Only the market helps to optimize resources and land is one of the three basic resources, along with labor, money and finance. In developed countries, land is a market, in our country, the transfer of land use rights is essentially a buying and selling activity. 30 years of Innovation “taught” us a lesson: the market is the smartest mechanism for efficient use of all resources. The same goes for land resources, just let the market operate, so resources will be used efficiently and property rights are also protected.

Reporter: In your opinion, has the current draft Land Law (amended) met this requirement?

– I think it is necessary to continue to correct at two points. Firstly, the part of the project that needs to change the land use purpose is still “recovery”, “apply” to change the purpose, and then “land allotment”. It is necessary to redesign according to the civil transaction mechanism as mentioned above. Second, the scope of land acquisition by the State under Article 78 of the draft Land Law (amended) is still too wide. It is not difficult for the parties who want to take the land to interpret and “dodge” the project to fit that oversized shirt. And moreover, it is necessary to boldly switch to “for sale” instead of “withdrawal” as mentioned above.

Reporter: Is there anything else to note in the process of amending the Land Law, sir?

– To effectively discuss and comment on amendments to the Land Law, it is necessary to distinguish between policy thinking and legislative techniques.

Approaching from policy thinking to correct land policy, the design of the market and market mechanism as above is the core and discussion and advice, therefore, it is necessary to go into major policy issues, not fall behind. in the law.

Accordingly, there are four major groups of issues that need to be “see” and separate when discussing: (1) the design of the land market; (2) financial policies related to land: tax, transfer fee; land property tax; land use tax (ie land resource tax); (3) territorial spatial use planning in relation to land; (4) land administration management (maps, extracts, measurements…).

In terms of legislative technique, policy issues can be found in different legal documents, not only in this law. Therefore, amending the Land Law is to discuss the policy, and only after agreeing on the policy, then amend the (technical) law both from the Land Law and other laws, such as the Law on Construction, the Law on Planning, and the Law on Housing, tax laws…

Article 78, the draft Land Law (amended) stipulates: “Socio-economic development projects for national and public benefits are projects that promote land resources, improve the efficiency of land use land, implement policies on infrastructure, urban, agricultural and rural development; solve social policy issues, protect the environment, preserve cultural heritage, fair and harmonious distribution of added value from the land, narrow the gap between rich and poor, in order to develop the land’s economy water, improving the people’s material and spiritual life”.

The State will recover land to implement socio-economic development projects for national and public interests, including:

1. Public investment project or investment project under the mode of public-private partnership; projects approved by the National Assembly; public works projects not for business purposes; projects to create land funds invested by the State; projects to build working offices of foreign organizations with diplomatic functions.

2. Projects of works for socio-economic development for the national and public interests that do not fall into the cases specified in Clauses 1 and 3 of this Article, including:

a) Resettlement project; project to build dormitory for students; social housing construction project; construction projects of official residences; projects to build concentrated housing for employees working in industrial parks; b) Construction project of waste collection and treatment works; c) Construction project of works serving the common activities of the population community; d) Projects on construction of religious establishments; dd) Projects to build markets in rural communes; e) Projects on construction of cemeteries, graveyards, funeral homes, cremation establishments; g) Industrial park projects; manufacturing area; High-tech Zone; industrial clusters; concentrated production and processing zones of agricultural, forestry, aquatic and marine products; h) Urban projects using types of land other than residential land; i) Projects on rural residential areas using non-residential land; k) Sea encroachment project.

3. Commercial housing projects using non-residential land types, provided that only land is recovered to create a land fund for auction of land use rights or bidding for projects involving land use. Mining projects that have been licensed by competent state agencies for mineral activities; Projects on urban embellishment and rural residential area embellishment, including projects to renovate and rebuild old apartment buildings and residential areas with environmental pollution, risk of landslides, subsidence, or be affected. by natural disasters that threaten people’s lives; or to relocate works, production and business establishments subject to relocation due to environmental pollution according to regulations or to arrange resettlement; residential areas are seriously degraded in terms of infrastructure and are not suitable for planning.

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