The Government has approved a proposal by the ministries of Finance and Natural Resources and Environment to reform out-of-date land prices structures and bring them more into conformity with market values.

The proposal will require final approval by the Nation Assembly, as land uses are governed by the Land Law.

Under the law, as amended in 2003, the Government sets a general land price frame-work for every city and province nationwide. Based on the framework, municipal and provincial People’s Committees are authorized to decide land prices within their jurisdiction, but the prices may not exceed ceiling price set in within the Government’s land price framework by over 20 percent.

However, due to the out-of-date land price framework, a square metre of urban land in Hanoi and HCM City is currently not allowed to exceed 81 million VND (3,850 USD), equal to only 30-60 percent of the actual maket value of the land, said the director of the Ministry of Finance’s public asset management department, Pham Dinh Cuong.

The situation was costing huge losses to the State budget in terms of land use fee revenue and was contributing to a rise in legal wrangling related land clearance and settlement, Cuong said.

After removing the current framework, the Government proposal would regulate only methods and principles for determining land value while local People’s Committees would set prices based on market principles. Higher values would result in higher land user revenues to the State Budget and would also allow authorities to pay higher settlements to persons whose land use rights were reveled, Cuong said.

He said that the ministry had also proposed that the clearance processes, promote and auctions and ensure greater transparency in the allocation of land use rights.-VNA