Auction of land use rights according to land law from the practice of Ha Dong district, Hanoi city - 10

Chapter 3

SOME ASSESSMENTS AND SOLUTIONS TO IMPROVE THE LAW TO IMPROVE THE EFFICIENCY OF AUCTIONS FOR USE RIGHTS

LAND IN HA DONG DISTRICT, HANOI CITY

3.1. Some assessments on land use rights auction in Ha Dong district

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3.1.1. Evaluation of the effectiveness of land use rights auction

a. On Economic Efficiency

In order to have solutions to improve the law on auctioning land use rights in Ha Dong district, Hanoi city needs to evaluate the effectiveness in many aspects of state management and requirements for land users. Therefore, for the State, in terms of economic efficiency, it is to reasonably exploit land funds in the process of management and use, mobilizing many capital sources to participate in construction investment. The State invests in lending to clear the land, build infrastructure, when auctioning land use rights, people and investors invest capital to participate. The proceeds will be used to repay state loans, develop local infrastructure, and develop the socio-economy.

+ Total estimated budget revenue at floor price is 571,793,162,000 VND.

+ Total budget revenue from the results of 5 auctions is: 839,910,024,000 VND.

+ The difference between the winning auction price and the floor price when organizing the auction is 1.47 times, equivalent to 268,116,862,000 VND.

Thus, through the auction of land use rights, it has contributed to increasing revenue for the State budget and the price of land use rights has approached the market price, at the same time creating capital from the auction of land use rights to invest in other projects and creating conditions for the conversion of occupations for local people when the State reclaims land to build works in general and land auction projects in particular.

Land use rights auctions are of great significance, helping to increase budget revenue, create investment capital for infrastructure construction, and create momentum to promote the country's industrialization and modernization.

For land users after winning the land use rights auction, the safety is very high, the buyer is guaranteed by the State the legality of the land plot, and is guaranteed to use the land legally with full documents. If buying land in the free market, the buyer often has to spend a lot of time to learn about the documents or planning location of the land plot before being able to make a decision, but for land brought to auction, these factors are all guaranteed. Land use rights auctions are conducted publicly, attracting many participants with many different bidding levels. Before the auction is conducted, auction participants study the auction documents, survey the field and conduct market research in the auction area, so they can perceive and evaluate the actual value of the land being auctioned. Therefore, when participating, they will proactively pay at the price they have determined and often offer a lower price than buying land in the usual way on the market.

For individuals, organizing land use rights auctions provides options for land plot locations suitable for each person (area, direction of land), offering prices suitable for economic capacity, without commission fees (brokerage) and other fees that brokerage centers often set. Convenient transportation system, infrastructure ensures the needs of users (such as electricity, water, roads...). The State guarantees the rights during the auction process as well as completes legal procedures in the process of granting land use rights certificates.

For organizations through winning the auction of land use rights, it is necessary to calculate in accordance with the economic capacity of each unit to invest in business, have premises for business, have full infrastructure, do not have to waste time in the process of site clearance; be guaranteed clean land fund, fully planned technical infrastructure; the area of ​​plots is suitable for market demand, thus convenient in the process of putting on the trading floor and with quick procedures.

b. Social efficiency

Due to the characteristics of Ha Dong as a new district, technical infrastructure has not been invested in accordance with the speed of social development, so the revenue from land use rights auction has been invested in

Investing in the construction of infrastructure, technical facilities, hospitals, clinics, water supply and drainage systems in the district...

Ha Dong District has also undergone many changes in administrative boundaries, and the real estate industry is still new and young, so the emergence and development of the land use rights auction form has also made the real estate market here more exciting. In general, the future will have a good development direction.

The auction process will create synchronous residential areas with technical infrastructure and social infrastructure systems that meet people's housing needs, creating stable living conditions and environments, in accordance with the general planning.

Thus, land use rights auction has contributed to enriching the activities of the real estate market. The State participates in the market not as a manager with rigid administrative orders (Decision on land allocation to whom? What is the area? What is the price? How is the tax calculated?) but directly participates in the real estate market as a partner. Factors such as land selling price, who receives land use rights (can buy the land) will be decided by the market and participants without the State needing to intervene.

Land auction is one of the socialized ways to attract people to participate in developing land funds and housing funds, thereby creating capital to solve other social policies such as: creating housing funds for low-income people, supporting families with difficult policies to improve their housing...

With land prices announced in land use rights auctions, the confusion and fluctuations in land prices of market participants will be eliminated, "virtual prices" of real estate will be erased, contributing to stabilizing land prices, creating conditions for the real estate market to develop healthily and sustainably.

c. Effectiveness in land management and use

In addition to economic and social benefits, land use rights auctions also bring about efficiency in land management and use, as shown in the following content:

- Land, special means of production, national assets with its own specific characteristics, land participates in the market and is fully exploited for its potential value, creating revenue for the cause of industrialization and modernization of the country, it can be affirmed that land use rights auction is a positive measure to effectively exploit land funds. The results obtained from land use rights auction confirm the role of land in the market economy, acknowledging land and land use rights as commodities in the real estate market.

- Land use rights auction is one of the bases and bases for the State to determine land prices, form the real estate market and contribute to creating price levels, creating stability for the real estate market. If land use rights auctions are conducted regularly and continuously in Ha Dong district, the actual land transfer prices for each ward in certain periods of time will be recorded. This is an important basis and basis to help the State determine land prices close to the actual land transfer prices, limiting the loss of revenue to the State budget from land.

- Land use rights auction, with simple and quick methods and procedures, without having to go through many levels like the land allocation and allocation mechanism, cumbersome procedures, wasting time and money of the State and people.

- Through land use rights auction, the work of granting land use rights certificates can be implemented quickly and conveniently for land management agencies, creating trust for land users.

- Land use rights auction is an effective form of land exploitation and use, creating healthy competition among auction participants to maximize social resources while eliminating negative factors in the "Request, Give" mechanism currently existing in many localities, contributing to the improvement of administrative procedures, accelerating the process of industrialization and modernization of the country.

- Resolve the change of purpose for agricultural land areas located in residential areas, land areas not used by units, and land plots located among other constructions.

- Proceeds from the auction of land use rights are used to build technical infrastructure works, contributing to more orderly land use in areas with technical investment, reducing illegal land encroachment.

3.1.2. Limitations in land use rights auction drawn from recent practice in Ha Dong district

From the reality of land use rights auctions in some projects of Ha Dong district in recent times, we can evaluate and point out some limitations as follows:

a. Organizational work

The investigation and determination of land use needs of the area and the establishment of floor prices in land use rights auctions are still unscientific and heavily administrative; This has led to the situation that recently, very few people have registered to participate in land use rights auction projects.

The procedure to put a plot of land up for auction currently involves too many steps and stages; from the time the policy to allow the auction is issued to the time the auction is opened still takes a long time. The financial capacity of the auction participants has not been checked, so there are many cases where one person participates in the auction of many plots of land, pushing up the auction price.

Ha Dong is organizing an auction for organizations for the first time, so there are still many difficulties in the process of determining the organization's capital source, confusion in some stages before and after the auction of land use rights (determining the money transfer order, documents proving the real estate business function). Regarding avoiding collusion when conducting auctions, there are currently no regulations to prevent it, no sanctions to punish it; The auction regulations also have shortcomings, each project has different auction regulations, although they are all approved by the city, it also causes difficulties for the people and organizations who need to buy land to learn.

b. For auction participants

There are cases where auction participants use a lot of land around the auction area, so they bid high to raise the price level of the area, then put down a deposit. For organizations, the deposit is very large, so some organizations do not have the initiative to source capital. Auction participants must have sufficient financial resources to fulfill their obligations after winning the auction.

Currently, in most land auction projects, there are cases where auction participants are speculating on land. In the case of re-transfer to others, the land price for calculating personal income tax and registration fees will be calculated based on the winning auction price. Therefore, it creates confusion in the market, not clearly distinguishing between real and virtual prices in transactions on land use rights.

c. For land management and urban construction

For projects auctioning land use rights, small plots will not create infrastructure connections with surrounding areas. If planning is not done well, it will lead to urban areas being divided into plots. Meanwhile, to overcome the situation of "urban areas being chopped up", the 2013 Land Law does not allow the form of land division and sale as before.

For land auction projects that are truly successful, a new price level will be created in the area, leading to local land price increases in the area where the land use rights auction project is located.

For organizations that win the auction, the investor is not allowed to sell the land plot separately but must finish building the house before selling, so organizations have arbitrarily signed contracts with individuals to transfer the land use rights on paper. The situation of arbitrarily adjusting the planning, reducing the public area by investors after winning the auction is common, the permitted construction rate is violated in all projects.

Currently, there is no uniformity in the management of land plots after they are put up for auction. Construction that is not in accordance with the license is quite common in many land use rights auction projects.

3.2. Some solutions on land use rights auction according to land law

3.2.1. State policy solutions

To effectively manage land, in the process of organizing land use rights auctions, the authorities must issue a legal system that is suitable to reality as well as ensures the rights of auction participants. In addition, some contents in the regulations should be adjusted to make them more appropriate, specifically:

Firstly, to extend the regulations on the time for paying the winning bid for land use rights. According to current regulations, organizations and individuals who win the auction must fulfill their financial obligations within a short period of time. Therefore, they need some time to arrange the payment of land use rights.

Second, detailed regulations on construction works on auctioned land for auctioned land lots in the planning area are one of the obligations of organizations and individuals winning the auction for land use rights and are stated in the Land Use Rights Certificate.

Third, develop and perfect the procedures and methods for auctioning land use rights. In reality, auction participants are quite diverse, including organizations, households, individuals, and later on, Vietnamese people residing abroad and foreign-invested enterprises. Therefore, the mechanism and method of organization should not be rigidly modeled, but should be applied flexibly to maximize the form of land allocation with land use fee collection, in which many entities participate and compete on price.

3.2.2. Technical solutions

First , about planning:

The planning of residential land auction areas must have a long-term vision, linked to the overall planning of the capital, towards a civilized and modern urban area. Land use must comply with the State's policies and laws on land management and use.

Second, about infrastructure:

Synchronous infrastructure construction must be ensured before organizing the land use rights auction to ensure compliance with the approved design, such as synchronization of electricity, road, water systems... to increase the value of land use rights auction.

3.2.3. Solutions on financial mechanisms

Firstly , the state should soon study and adjust and supplement a number of taxes and fees related to land use rights auctions and the real estate market in the direction of encouraging effective use of real estate, while strongly developing official transaction types in the market.

Second , the state regulates the use of auction funds to invest in housing development for policy beneficiaries and low-income people, creating a ready fund for rental housing, installment housing and resettlement so that when land is recovered, there can be a place for the recovered people to resettle immediately.

Third, create conditions for investors to pay in the most reasonable way, avoiding the situation of missing deposits because this will affect the reputation of future auctions. Resolutely resolve the above situation of "brokers" to have measures to prevent harassment in auctions.

- Research and promulgate synchronous legal documents on land management and use regimes and specific regulations of the Hanoi People's Committee on land use rights auctions to reduce administrative procedures and help auction participants save time in learning.

- The process of establishing and implementing auction projects requires close supervision by management agencies, a cross-checking mechanism, increased supervision by people and press agencies, thereby preventing possible negative behaviors.

- Research technical solutions to improve the auction process such as: how to plan construction to suit the needs of auction participants in the project implementation area, pricing methods to set a more appropriate floor price...;