Theoretical Basis and Legal Regulations on State Management of Land Prices in Vietnam

The main cause of the inadequacies in land prices in Vietnam in recent times is the limitations in regulations and practices of the State's management role in land prices; the State's management rights - representing the entire people's ownership in the context of market economic development - have not been effectively resolved. The strictness and science in State management of land prices are the foundation for creating breakthrough development in land economy, optimizing land resources in the development process in Vietnam.

The specific research hypotheses when approaching to solve the problems are set forth as follows:

Firstly, land price is the decisive factor in the economic value of land, a tool for the State to organize production, distribute land and implement social justice; directly affecting the budget revenue and the rights and obligations of land users. Land price creates positive and negative impacts on socio-economic development. Because of the importance and impacts of land price, it shows the necessity of the State's management role in land price.

Second, the characteristic of the existence of state land prices and market land prices has shown the strong influence of the State on the mechanism of land price formation in our country. State land prices and market land prices have a mutual impact relationship and are balanced by the State's management role. State management of land prices can only achieve optimal efficiency when clearly understanding the characteristics and relationships between types of land prices and developing appropriate management content and methods for each type of land price.

Third, the law and practice of State management of land prices in Vietnam have not yet fully reflected the State's management role, have not yet ensured the necessary contents, the forms and methods of management are still limited, the management subjects have not been organized and assigned appropriate tasks and powers, so land prices in our country still have many shortcomings and cause consequences for socio-economic development. The shortcomings in State management of land prices are caused by the existing problems in the land management institutions in Vietnam and the limitations in the requirements of modern land administration.

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Fourth, research on the application of good governance theory in perfecting the components of the State management structure on land prices, specifically: perfecting the principles, objectives, contents, forms, subjects and methods of land price management is very necessary and appropriate to build a scientific, modern and effective State management mechanism on land prices. In order to meet the requirements of comprehensiveness, efficiency and thoroughness, solutions must be considered in the correlation between land price management and other contents in land management; between state land prices and market land prices.

CONCLUSION

The content of the overview of the research situation and issues that need further research helps the author of the thesis identify the research problem, choose the research approach to confirm the novelty of the topic of State management of land prices. The research results of this chapter are the foundation for implementing the thesis research, deciding the feasibility and effectiveness of the thesis. This chapter has brought about the following specific results:

Firstly, through the evaluation of related research works both domestically and internationally, the topic has identified the issues of the State management thesis on land prices that need to be further resolved, demonstrating the novelty of the thesis in the study of land prices in Vietnam. The studies mainly approach and solve the land price issue from the economic perspective - commodity prices in the market, and have not comprehensively studied the State's management role on land prices on the basis of administrative law science.

Second, the content of the chapter clearly and coherently presents the urgency of the topic, research purpose, research tasks, research scope, research objects and research methods of the thesis. Thereby, demonstrating the coherence, continuity and feasibility of the research content.

Third, with the framework of the research orientation of the thesis on State management of land prices expressed through the research purpose, research tasks and research objects, the author has researched, selected and analyzed appropriate research theories, which are the foundation for research and solving the problems raised.

Fourth, based on the thesis research purpose, the author has developed the thesis research questions including general research questions and detailed research questions to address specific purposes.

Fifth, the author has built research hypotheses that are compatible with each research question. The structure of the thesis is established to answer the research questions through proving the built hypotheses.

The research results of this chapter are the foundation for establishing the overall content of the thesis from identifying the research problem, research approach, tasks, scope and research methods of the thesis.

CHAPTER 2. THEORETICAL BASIS AND LEGAL REGULATIONS ON STATE MANAGEMENT OF LAND PRICES IN VIETNAM

2.1. Overview of land prices

2.1.1. Concept and characteristics of land prices

William Petty (1623-1687) stated: "Labor is the father, the land is the mother of all wealth" . 97 Supporting the great role of land in social life, Karl Marx said: "Land is an eternal asset for mankind, a necessary condition for survival, an indispensable condition for production, a basic means of production in agriculture" . 98 Land is a type of property, the most valuable natural resource for humans. 99 The above statements have affirmed the indispensable role of land in human life and development.

Land is generally understood as a specific area of the earth's surface, including all the elements that make up the ecological environment right above and below its surface. 100 The 7th Conference of the 9th Central Executive Committee continued to innovate land policies and laws in the period of promoting industrialization and modernization of the country, affirming: "Land is an extremely valuable national resource, a special means of production, a great internal resource and capital of the country; land use rights are special goods" . 101 Land use rights here are not understood separately as the right to use in ownership rights, but land use rights are the sum of the rights and obligations of land users, including transaction rights as a tangible asset. Determining the object of transfer in the market will affect the concept and nature of land prices. In the context of our country, when land use rights are identified as commodities, is the price of the commodity called the price of land use rights or land price? In terms of economic nature, C.

Marx believes that land price is a form of land rent capitalization; land price is the value of land rent on the rate of profit from production and business on that land and also in cases where no production and business is carried out (C. Marx believes that this is a case where there is no value but there is a price). 102 This shows that land price is the monetary expression of land value, but it does not mean that the price is only determined by its value, but land price is also formed and affected by many factors.

97 Mai Ngoc Cuong, Tran Viet Tien, Mai Ngoc Anh (2016), History of economic theories, National Political Publishing House, Hanoi, p.75.

98 Ngo Duc Cat (2000), Land resource economics, Agricultural Publishing House, Hanoi, p.5.

99 Wang Chenguang and Zhang Xianchu (1997), Introduction to Chinese law, Sweet & Maxwell Asia, Hong Kong, p.541.

100 Chu Van Thinh (director, 2000), Summary report of research results of independent state-level topics: Scientific basis for policy planning and rational use of land funds, General Department of Land Administration - Institute of Land Administration Research, Hanoi , p.181.

101 Communist Party of Vietnam (2003), Documents of the 7th Conference of the 9th Central Executive Committee, National Political Publishing House, Hanoi, p.61.

102 Ho Chi Minh National Academy of Politics (2006), Scientific overview of the ministerial-level topic: Marxist-Leninist theory, Ho Chi Minh's thought on land issues and its application to perfecting the Land Law in Vietnam, Hanoi, p.7.

From the perspective of Law , land price is “ the amount of money calculated per unit area as regulated by the State or formed in transactions on land use rights ”. 103 Authors Dinh Thi Nga and Bui Van Huyen believe that: “ The value of land is partly due to nature, partly due to human exploitation and use of land. When land is bought, sold, or transferred, the value of land is expressed in monetary form, called land price ”. 104 Author Luu Quoc Thai believes that, “ land price is the price of land, is the measure of value for this type of commodity to circulate on the market ”. 105 Accordingly, all viewpoints point to land price as the exchange value of land, or in other words, land price is the price of land. Although there are different approaches, the above views all show that: land price is the expression of the monetary value of land, formed in the process of market exchange, land price reflects the inherent characteristics of land and the impact of surrounding factors.

The term “land price” was first mentioned in the Resolution of the Second Conference of the 7th Party Central Committee on December 4, 1991 on the tasks and solutions for stabilizing and developing the socio-economy in the years 1992 - 1995. On that basis, the 1993 Land Law officially recognized and regulated land prices. Article 12 of the 1993 Land Law stipulates: “The State determines the prices of land types to calculate land use right transfer tax, collect money when allocating land or leasing land, calculate the value of assets when allocating land, and compensate for land damage when reclaiming land. The Government regulates the price framework for land types for

for each region and each period of time” . The first regulation defining land price is Article 4 of the 2003 Land Law: “Land use right price (land price) is the amount of money calculated per unit of land area as prescribed by the State or formed in land use right transactions” . This concept has acknowledged the two land price mechanisms in our country, including: state price and market price. Article 3 of the 2013 Land Law stipulates that “ land price is the value of land use rights calculated per unit of land area ”. To better understand the value of land use rights, Clause 20, Article 3 of the 2013 Land Law explains that “ land use right value is the monetary value of land use rights for a specified area of land within a specified land use period” . With the above regulation, the concept of land price must be defined through the value of land use rights, but in essence there is a difference between these two terms. Because the value of land use rights is the value of a certain area, while the land price

calculated only on a unit area of m2 . Therefore, the phrase "land use rights value"

mentioned in the concept of land price in Clause 19, Article 3 of the 2013 Land Law is only intended to

103 Ministry of Justice - Institute of Legal Science (2006), Dictionary of Law , Encyclopedia Dictionary Publishing House and Justice Publishing House, Hanoi, p.238.

104 Bui Van Huyen, Dinh Thi Nga (2011), op. cit. (14) , p.48.

105 Luu Quoc Thai (2011), “Mechanism of land price formation and application according to current law”, Journal of Legal Science, (3), pp.39-44.

106 Previously, the 1987 Land Law stipulated that land had no price and did not allow transactions. The concept of land is a gift from nature and the State only distributes land through a single form of land allocation without collecting land use fees. The draft of the revised Land Law submitted at the 3rd session of the National Assembly

The 9th session, June 24, 1993 clearly stated: "Recognizing the economic value of land, regulating land prices, land prices are determined as an economic tool for the State to manage land according to market mechanisms".

The purpose of determining this is the monetary value of land use rights. In addition, there needs to be a distinction between the concepts of land price and land use rights price. The author believes that, in countries with diverse land ownership, especially those that recognize private land ownership, there will be a clear distinction between the two concepts above. In the land management system in Vietnam, when land is only identified as being owned by the entire people, "land can be considered a commodity and the land market still exists in the form of a land use rights market". 107 Therefore, the terms land price and land use rights price in the Land Law

Our country is understood similarly. Through the above analysis, it can be seen that the concept of land price in the 2013 Land Law is quite circular, does not mention the characteristics of land price, does not reflect the true nature of land price with the requirement of optimally promoting land resources in the development of the market economy in our country today.

From the above analysis, the author of the thesis gives a general understanding of land price as follows: land price is the monetary value of land use rights per unit area at a given time . Compared with the concept of the 2013 Land Law, the concept proposed by the author has some fundamental differences: (i) directly defining land price, not through the concept of land use rights value as in the current Law; (ii) land price is determined at a specific time, because the author believes that at different times land price will have certain fluctuations, this factor also shows the influence of land use duration on land price. The above concept directly shows the commodity nature of land in the concept of land price, the fluctuating characteristics and the individuality of land price. Land price has the following basic characteristics:

Firstly, land price is a special commodity price in the market. Land is a special means of production, playing an important role, decisively influencing human development; land is a special commodity in the market. Therefore, land price also has the basic characteristics of commodity prices in the market, influenced and governed by market rules. However, the special nature of this commodity has created certain influences on the process of formation and movement of land price, typically the impact and intervention of the State on land price. With different forms of ownership, different concepts about the role of land in the development process have formed the characteristics of State intervention and management of land price in different countries.

Second, land prices reflect the characteristics of each individual plot of land and are influenced by many external factors . Natural, legal and surrounding factors create the uniqueness of each plot of land, which are reflected in land prices. The factors that make up land prices are divided into two basic groups: fixed and unchangeable factors such as location, shape, soil conditions, etc. and changeable factors, typically: land use purpose, land use planning,

107 Luu Quoc Thai (2016), op. cit. (4) , p.46.

Legal factors, infrastructure conditions... Human impact through management and investment activities has changed the above factors, increasing the profitability of land, thereby creating certain changes and fluctuations in land prices.

Third, land prices tend to increase over time and are difficult to reverse. With the nature of land having no substitute goods, the total supply of land is a limit and the supply curve fluctuates little while the demand for land tends to increase continuously. Therefore, land prices move in an upward direction, even creating a phenomenon of land prices suddenly increasing in a short time. For example, according to statistics from the Ministry of Construction and many real estate research organizations, despite the impact of the Covid-19 pandemic, in the first quarter of 2021, land prices in many places increased by 2-3 times compared to the same period last year; the average price in localities increased by about 5% - 10% compared to the fourth quarter.

2020. 108 Although the market has fluctuated, statistics from 1993 to

In 2013, the average price of real estate in our country increased about 100 times and in the period from 2003 to 2013 it increased about 10 - 12 times. 109

Fourth, land price is one of the important bases of economic development strategy. Through land price, the value of land transactions is determined, which is the basis for calculating revenues for the state budget; deciding the value of public asset exploitation. Land price is a signal of the market, a tool for land financial management, and effective land distribution in the market economy. The development of land price in the market, land price in land distribution are decisive factors for the investment and business strategies of investors. Therefore, land price is one of the bases for building the strategy for developing the state and private economy.

Fifth, land prices show strong interactions with macroeconomic management policies. Unlike other common commodity prices, which originate from the important role of land and the influence of land prices in the real estate market, fluctuations in land prices have a certain impact on macroeconomic management policies and vice versa, changes in those policies have a strong impact on the development of land prices in the market and the State's right to decide on land prices. Typically, certain adjustments in monetary policy, exchange rates and interest rates of credit institutions will determine the amount of cash supply invested in the real estate market, thereby affecting land prices through the law of supply - demand and prices. At the same time, to ensure the stable and sustainable development of the real estate market, land prices are a signal for the State to establish and adjust the above policies.

The characteristics of public ownership of land and legal regulations in land management and use have created unique features for land prices in Vietnam:

108 Nguyen Manh (2021), “Revealing a series of places that are shocking because land prices have doubled”, https://dantri.com.vn/bat-dong-san/tiet-lo-loat-noi-gay-choang-vang-vi-gia-dat-tang-gap-doi-20210509091600437.htm [accessed May 10, 2021].

109 Le Thanh Ngoc (2014), Residential real estate bubble in Ho Chi Minh City", PhD thesis in economics, Banking University of Ho Chi Minh City, p.80.

Firstly, the existence of a two-price mechanism: state land price and market land price. State land price is formed by the State's right to decide on land price; meanwhile, market land price is the price of land use rights formed by transactions on the market. The Land Law over the periods has acknowledged the parallel existence of state land price and market land price with the principle that the State decides the land price must be consistent with the market price, but in reality there is a large difference and most state land prices are much lower than market land prices. State land price in Vietnam has only been officially regulated since the Land Law in 1993, while market land prices have appeared before that in actual transactions. The rapid increase and many changes in market land price have created attractiveness in investment in the real estate market in Vietnam but created a large gap with state land price; this has a certain impact on the effectiveness of land price in managing and exploiting land value. Therefore, to effectively manage land prices, not only the management mechanism for state land prices but also the management contents that affect state land prices and market land prices need to be considered and improved.

Second, land prices are strongly influenced by the State's management role through legal factors. As the representative of the entire people's ownership, the State has the right to decide on land prices applied in the primary market (land allocation, land lease, recognition of land use rights) and also when determining the value of land compensation when the State reclaims land. Therefore, State land prices are considered the input price of secondary market land prices. At the same time, through the promulgation of regulations on principles and methods of land valuation, regulations on land valuation and land management, the State's management role has affected the process of formation and movement of land prices. Legal factors are the main tool to demonstrate the State's will to control land prices in Vietnam. Therefore, land prices in our country are both formed based on the nature of the economic value of land and are strongly influenced by the State through legal factors. Typically, when the Land Law officially recognized land prices, through legal factors, it created and widely applied state land prices. These land prices are completely affected by legal regulations on procedures, methods and limits to set land prices according to the will of the management entity with principles that are considered to be based on the market foundation.

Third, state land prices are widely applied in land management and use. Since the 1993 Land Law, when it began to regulate land prices, the Land Law has recognized the two-price land mechanism in our country and widely applied the land price table in land finance. Up to now, the 2013 Land Law has appeared and widely applied specific land prices - these are still state land prices but are flexible, individual and reflect the market mechanism more clearly. With the large difference between state land prices and market land prices and the application of state prices in determining the rights and obligations of land users, there have been fierce disagreements about determining and applying land prices in Vietnam.

Thus, the characteristics of land prices and the characteristics of land prices in Vietnam show the direct impact relationship between the State - land prices - land economic development in which the State's management role is very important. Land prices, as an intermediary impact, a scientific, modern and effective management mechanism will fully demonstrate the State's purpose in developing the land economy and realizing economic goals.

- society. Comprehensive awareness of the State's management role combined with the characteristics of land prices, especially the characteristics of the two-price land mechanism in Vietnam, is the basic foundation for establishing a State management mechanism on land prices.

2.1.2. Factors forming and affecting land prices

Based on economic theories and characteristics of land prices, the author argues that the basic factors that form land prices include: (i) natural factors of land : the natural factors of each plot of land are the basis for forming land prices, including: location, size, shape, area and terrain, surface and underground characteristics. These natural factors are the basis for forming state land prices and market land prices.

(ii) Land profitability. The ability to gain profit from land exploitation and use is proportional to land price. This profitability includes the ability to bring current and future benefits. The uniqueness of the natural factors that make up land price reflects the different profitability of each plot of land, creating differences in land prices in different locations. Through human impact, surrounding factors can be changed, increasing the profitability of land, for example: the State invests in expanding roads, building surrounding infrastructure... Those changes affect both the land price decided by the State and the agreed price in market transactions. (iii) Impact of the law of supply and demand in the market . With the economic nature of commodity prices being determined by supply and demand in the market, fluctuations in supply and demand for land are factors that directly affect the formation of market land prices and the basis for determining state land prices.

In addition to the forming factors, land prices are also strongly influenced by the impact of surrounding factors. Author Tran Thi Minh Chau believes that land prices formed in the market depend on the supply-demand relationship, price information, partly depend on the preferences and psychology of the parties to the transaction, the location of the land plot and many other factors. 110 Authors Hoang Viet and Hoang Van Cuong divide the peripheral factors affecting land prices into: physical factors of land, economic factors, legal factors and surrounding environmental factors. 111 With the special mechanism of two land prices in our country, the level of influence and impact of factors on each type of land price is different. The factors affecting land prices are summarized as follows:

(i) State economic management policy

110 Tran Thi Minh Chau (2013), Land capitalization in the socialist-oriented market economy in Vietnam, National Political Publishing House - Truth, Hanoi, p.30.

111 Hoang Viet, Hoang Van Cuong (2008), op. cit. (47) , p.49.

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