The most breakthrough point of Resolution 18 lies in land price policy. The Resolution calls to "abolish land price frame, develop mechanisms and methods to determine land price according to market principle."

This spirit was institutionalized in Land Law 2024 by the regulation on building land price table close to market price. This is a reasonable idea in theory, but based on an important assumption: market price correctly reflects land value.

Reality afterward shows, in a market still with speculation, unreasonable auctions, planning expectations and transactions not transparent enough, that assumption is not always true.

In many cases, "market price" does not reflect the real economic value of land.

When a land price table is built on those prices, consequences appear quickly. Land price tables in many localities increase sharply. Land use fee and land rent increase. House prices continue to escalate. Young people find it increasingly difficult to access housing, while many manufacturing enterprises are no longer able to expand premises.

At a recent meeting between Prime Minister and the business community, Dang Hong Anh, chair of the Vietnam Young Entrepreneurs Association, said enterprises see land rent increasing from about VND600 million in 2016-2020 to VND20.8 billion in 2026-2030, i.e., about 35 times compared to the time of the initial land lease contract signing. In 2025 alone, land rent accounted for 50 percent of net revenue.

That is no longer the story of the real estate market alone.

When land costs outpace revenue-generating capacities, land transitions from a production input into a financial asset, and landowners hoard property waiting for price appreciation or lease at exorbitant rates. Those without land face mounting barriers accessing development resources, whether for housing or commercial production.

Furthermore, as land price lists strictly mirror market fluctuations, State capacity to regulate general land price levels narrows. 

From a fiscal standpoint, higher land prices may boost budget revenues. However, if land prices rise faster than the economy's capacity to create value, investment, production, business, and housing costs will escalate, eroding corporate competitiveness and public access to land.

This context prompted Resolution 21 to adopt a different approach to land pricing policy.

Resolution 21 and the return of State’s regulation

After identifying shortcomings in land management, utilization, and legal enforcement, Resolution 21 established a new framework for land pricing policy.

The resolution mandates: "The State regulates, controls, and decides land prices upon putting land into use, preventing the formation of a multi-price mechanism."

Notably, the resolution not only emphasizes the State's regulatory role but also targets eliminating multi-tiered pricing mechanisms. This indicates the objective is not merely setting a specific land price, but rather building a transparent, unified pricing system that mitigates price gaps vulnerable to profiteering, litigation, and resource misallocation.

This represents a fundamental shift in how land pricing is viewed. Land price is no longer treated solely as the product of market supply and demand, but as a strategic tool to achieve development goals.

A reasonable price level must not only reflect land value but also ensure citizens can access housing, businesses can invest in production, and the State retains sufficient resources for infrastructure development.

Controlling land prices at reasonable levels creates conditions to reduce site clearance costs for infrastructure projects, industrial zones, social housing, railways, and public works. 

Investment costs for enterprises drop, public housing accessibility improves, and overall economic competitiveness gains opportunities for enhancement.

However, this new mechanism presents a significant institutional challenge. Granting the State greater authority to regulate and determine land prices requires a corresponding increase in power oversight mechanisms.

In practice, the State acts as the representative owner of land, decides land valuations, allocates and leases land, collects land use fees, and utilizes those revenues for the budget. Without effective checks and balances, land price lists could easily be driven by short-term revenue collection or administrative targets rather than sustainable development goals.

Another risk that must be factored in is the danger of shifting from market-based valuation to administrative pricing. Lacking comprehensive data, scientific valuation methods, and independent appraisal teams, land prices may fail to accurately reflect local development conditions. 

For this new mechanism to succeed, indispensable elements include a comprehensive land database, transparent valuation methods, independent valuation organizations, and robust mechanisms for social critique, accountability, and power oversight.

Tu Giang