VIETNAM, October 22 –
HÀ NÔI — Việt Nam needs to find more radical solutions to prevent the rampant division of land for sale for the healthy development of the real estate market.
According to the Ministry of Natural Resources and Environment, dividing up land plots and converting land for sale has been rampant and illegal in many provinces and cities in recent years, which combined with the activities of speculation, caused a land fever and market disruption.
The consequences are severe as land prices rise, farmers have no land to cultivate and planning is disrupted.
A report by the Ministry of Construction pointed out that small investors collected residential land, agricultural land and land for perennial crops in many provinces, including Đồng Nai, Bình Phước, Bà Rịa – Vũng Tàu and Đắk Lắk then divided into plots for sale, causing threats in the real estate market.
To prevent rampant and illegal land division, the Ministry of Natural Resources and Environment in late August requested provinces and cities to improve land management and strictly handle the illegal division of agricultural and forest land.
Many provinces and cities have tightened the management of land parcel division and the issuance of land ownership certificates, or even temporarily halted the processing of land parcel division procedures to calm the rising land fever.
The Hà Nội People’s Committee recently called for inspections to be carried out to prevent and strictly deal with cases of leveling hills, mountains, lakes, ponds and riverbanks, which are then divided into plots to be sold for profit. and illegal construction on agricultural land.
The capital suspended at the end of March the reception and processing of administrative procedures for the sharing of agricultural and non-residential plots. At the same time, a draft regulation on the conditions for the division of land in the capital was being developed.
The suspension, coupled with the imposition of a transfer tax on market prices, led to a significant drop in land transactions on the outskirts of the capital. A report by the Municipal People’s Committee showed that budget revenue from houses and land was low in the first eight months of this year, equivalent to 41.5 percent of the plan.
Other provinces have also taken steps to tighten land division, such as the southern province of Đồng Nai, which from October increased the minimum area of agricultural land before division from 1,000 m² to 2,000 m². .
The tightening of the division of plots was a short-term solution to calm the land fever. However, Việt Nam needed to find more radical solutions to prevent speculation and ensure the healthy development of the real estate market.
Cấn Văn Lực, a member of the National Financial and Monetary Policy Advisory Council, said the tightening of the land division was only a temporary solution. The long-term solution should be to develop a tax instruction to prevent land speculation, Lực pointed out.
Land fragmentation should not necessarily be prohibited but should respect planning, Lực said.
Đặng Hùng Võ, former deputy minister of natural resources and environment, said the low tax rate on assets was one of the reasons for the speculation that caused land fever, formed a bubble and inflated the housing prices.
The consequence has been severe, Võ said, pointing out that high land prices would undermine national competitiveness, lead to difficulties in attracting investment, lead to the inability to meet demand for affordable housing and loss of regulation of population density and strain the infrastructure system.
Development of the asset tax was necessary, coupled with amendments to the land law, Võ said.
Việt Nam should also put in place policies to encourage people to invest money in production and business rather than real estate assets to profit from price increases, he added.
Nguyễn Văn Đính, vice-president of the Real Estate Association of Việt Nam, says that each locality must have a land use plan with a long-term vision and make it public, which would avoid speculation.
Imposing taxes on people who own more than one piece of land or house or leave their property deserted should be considered, Đính said.
Land was a limited resource and played an irreplaceable role in urbanization and socio-economic development, said Trần Kim Chung, former deputy director of the Central Institute of Economic Management, adding that proper utilization of land resources would help not only attract investment, but also increase budget revenue. —VNS