Difficulties in collecting budget from land use rights auctions

Compared to previous years, in 2023, land use fee collection in the province will face many difficulties due to economic downturn and sluggish real estate market. It is forecasted that in the remaining time of 2023, many communes, wards and towns will continue to accelerate the completion of infrastructure, organize auctions of land use rights, and strive to complete the assigned plan.

In 2023, the province set a target of collecting about VND 3,800 billion in budget revenue from land use fees. To strive to achieve this result, since 2022, localities have closely followed the annual land use plan, submitted to competent authorities for approval of planning, built residential areas, organized site clearance, and auctioned land use rights (LURs).

Many communes, thanks to closely following market demand and quickly building land use rights auction areas, have increased local budget revenue. A typical example is Thanh Tan commune (Thanh Liem), which has just organized an auction of 171 land lots with a starting price of more than 74 billion VND, the winning price was 154 billion 602 million VND, after deducting infrastructure costs, the remaining amount according to the commune's allocation ratio will be used for local investment. Mr. Dao Xuan Anh, Chairman of Thanh Tan Commune People's Committee, said: With the goal of increasing commune budget revenue, paying public debt and continuing to invest in building infrastructure to serve people's lives, Thanh Tan commune has planned a residential area right near the commune center. This is an area with a convenient traffic location, close to the district road, so many people are interested in auctioning land use rights. As a result, the average land lots after the auction increased by 1.5 to 2 times compared to the starting price.

To achieve this result, since 2021, Thanh Tan commune has reviewed the local land use plan, grasped the market demand, and proposed to superiors to build a residential area. The project construction work was also deployed quickly and widely announced to many people. This method has attracted many households to participate in the land use rights auction, contributing to increasing the state budget revenue.

Difficulties in collecting budget from land use rights auctions — **Officials of the Thanh Liem - Binh Luc District Tax Department review budget revenues from land.** Photo: Tran Huu

Like Thanh Tan commune, in recent times, many communes and towns in the province have increased budget revenue from land use rights auctions. According to practical experience in localities, if you want to have clean land for auction, you must develop and implement a plan a year in advance. The location must be near main roads, convenient for traffic and the land has long-term profit potential. When the location is announced, it is necessary to organize a meeting with people, publicize the project, and propagate and mobilize people to quickly hand over the land to build new residential areas. The process of implementing infrastructure construction at auction sites must also be synchronous, connecting infrastructure in the area so that people can easily build houses. With this approach, although the real estate market is quiet, many communes in the province still organize auctions of land use rights, contributing to increasing budget revenue.

However, compared to previous years, in 2023, the implementation of land use rights auctions will face many difficulties due to the economic recession and the sluggish real estate market. At present, most commercial banks in the area have limited lending for real estate investment because investing capital in this field can potentially pose many risks. Many commercial banks only invest capital in production and commercial sectors, lending to households to improve their lives, buy land, build houses and do not invest in real estate business loans. According to economic experts, tightening real estate credit has a positive side in that it contributes to controlling the money supply in the real estate market compared to the previous period and the budget revenue from land money also decreases accordingly.

Mr. Dao Xuan Chien, Director of the Property Auction Service Center (Department of Justice) said: From the beginning of the year to the end of November, the Property Auction Service Center has organized 10 land use rights auctions, with 746 plots, with a total area of over 73,762 m2, with a starting price of over 644 billion 704 million VND. After the auction, localities collected over 908 billion 610 million VND.

According to Mr. Chien, compared to the years before 2023, the auction of land use rights in localities encountered many difficulties. For example, the auction in Le Hong Phong ward on September 15, 2023, there were 91 land lots, of which 55 people registered to buy documents and the first session only auctioned 48 lots; by October 20, 2023, the center had to continue auctioning the remaining 43 lots. The starting price of 91 land lots was more than 190 billion 534 million VND, the auction price was more than 209 billion 274 million VND, a difference of more than 18 billion 739 million VND. If at peak time, the real estate market was bustling, the auction of 91 land lots in Le Hong Phong ward would have had 500 - 700 documents, but this year very few people participated.

According to the synthesis of districts, towns and cities, in 2023, the auction of land use rights and budget collection from land fees in localities will face many difficulties. Up to this point, Duy Tien town, Kim Bang district and Thanh Liem district are all still short of nearly 300 billion VND to complete the plan. Striving to complete the assigned plan, in December, localities will auction residential areas with completed infrastructure and collect land use fees from enterprises. During this time, the Provincial People's Committee directs functional branches and localities to quickly complete the land use rights auction areas, announce land prices; hand over clean land to investors... to strive to complete the plan to collect budget from land fees.

Tran Huu

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