The Party Central Committee at the 12th Central Conference, Session XIII stated the answer: land is a special national resource, an important resource for socio-economic development, and must be managed transparently, ensuring the common interests of the entire people.

That spirit means that land cannot be a "playground" for speculation, land rent differentials, or a tool for budget exploitation.

Land price frameworks

A core weakness of the 2013 Land Law is the land price framework, in which the government sets ceiling and floor prices, while localities set price tables for their localities within those limits. 

In reality, state-regulated land prices are often only 20-30 percent of market value, which is believed to be the cause of over 80 percent of land-related complaints nationwide.

To address this, lawmakers suggested a new approach: localities set price tables “aligned with market prices”. However, the “market prices” localities refer to when setting their local land prices are the ‘bubble prices’ seen in transactions where buyers are speculators. The prices are abnormally high, inflated by some individuals and interest groups. As a result, land prices have skyrocketed, which don’t truly reflect the value of the land, but reflect the speculative expectations.

Price increases are not only attributed to the abnormally high price levels, but also to flawed land finance policies. A prime example is the 5.4 percent additional tax on unpaid land-use fees, which many businesses struggle to manage.

Novaland Group, for example, has a RichStar project that was valued in 2016 at VND689 billion but has not been approved. After nearly 10 years, the investor has been requested to pay an additional retroactive rate of 5.4 percent/year, and the amount is VND370 billion—a "terrifying" number as described by Cao Minh Hieu, Vice Chair of the Executive Board of the group.

Novaland, with a dozen stalled projects, is just one case. Nationwide, 2,887 projects face land-related issues, involving over $235 billion in capital and 347,000 hectares. If the same retroactive tax applies, the total amount of tax businesses have to pay may amount to $126.9 billion over a decade—a figure that paralyzes any investment plan.

If realtors don’t pay taxes and land fees, they cannot obtain red books (lan-use right certificates), cannot sell properties, raise capital, or manage cash flow. Projects will become frozen, citizens will be stuck, businesses will stagnate, and the economy will grind to a halt.

Budget revenue 

In the first half of 2025, after the “market price list” was applied, budget revenue from land reached VND198,300 billion, an increase of 105 percent compared to the same period last year.

Local newspapers reported that a household in Nghe An wanted to convert their land from garden land to residential land. The paradox is that while the land plot is valued at VND3 billion, they have to pay VND4.5 billion in tax.

In HCM City, Hoc Mon area has witnessed the official land price table set by local authorities increasing by 38 times. As a result, many households cannot pay tax to convert their garden land into residential land.

The increases in revenue from land creates a "bumper" for the budget. But if land is just a tool to feed the budget—instead of becoming an input for investment, production and people’s livelihood—the economic benefits are short-term and unsustainable, and cause long-term damage.

Land prices through the lens of justice

Ideal land prices are prices that can balance the interests of different parties: preventing state tax losses, ensuring business profitability, preserving people’s housing opportunities, and avoiding market distortions.

This requires rational, transparent, and stable land finance policies. Instead of retroactive taxes, a progressive land ownership tax—higher for those holding more land—should target hoarding and speculation, not genuine housing needs.

Businesses have proposed abolishing the 5.4 percent retroactive tax in the upcoming revision of Decree 103. This seemingly small policy change could unlock hundreds of projects, release billions of USD, and revive countless businesses on the brink of collapse.

Amending the Land Law cannot stop at technical tweaks. The new law cannot be a mere patch. It demands a comprehensive overhaul of land governance guided by a core philosophy that land must serve equitable and sustainable development and for the common good of all people.

Tu Giang