Prime Minister Pham Minh Chinh has just directed the Ministry of Natural Resources and Environment to preside over and coordinate with the Ministry of Construction and relevant agencies to study the establishment of a land use rights (LUR) trading floor. The establishment of the LUR trading floor aims to institutionalize Resolution 18 of the 5th Central Conference, 13th tenure on continuing to innovate and perfect institutions and policies, improving the effectiveness and efficiency of land management and use, creating momentum to turn our country into a developed country with high income.
Positive signal
Up to this point, the relevant ministries and sectors are still in the process of researching the establishment of a land use rights exchange, so there is not much information to provide. However, experts and enterprises in the real estate sector all recognize this as a correct, innovative and good policy for the market.
Financial and real estate expert Dr. Pham Anh Khoi said that Vietnam already has a stock exchange, a commodity exchange, and a newly established bond exchange… all of which are performing very well, creating benefits for all parties. Buyers and sellers are not "overpriced", while saving time and costs for all parties.
According to Mr. Khoi, in developed countries, up to 99% of real estate assets are traded through exchanges, and no one buys or sells directly to each other. In Vietnam, for a long time, private exchanges have mainly traded future real estate without the right to use (apartments, project houses), while residential houses and land use rights have not been traded through exchanges.
Mr. Ngo Duc Son, General Director of DRH Holdings Joint Stock Company, also assessed that the Government 's policy of establishing a land use rights trading floor is positive information for the real estate market. Because when there is a floor, the assets are land use rights must be strictly verified by the parties before being put into transaction; there is a clear and transparent transaction mechanism to protect the safety of both buyers and sellers; buyers can easily establish the right to use once when combining notarization and registration of name change, thereby minimizing administrative procedures. The trading floor also helps to manage land prices and calculate taxes more conveniently, limiting losses in tax declaration and payment.
Mr. Tran Khanh Quang, Director of Viet An Hoa Real Estate Company, said that when implementing the land use rights trading floor, the Government may want to exploit all the functions and values of land use rights assets to bring benefits to all parties.
Specifically, when there is a land use rights trading floor, land fund enterprises that need to transact or cooperate will easily find suitable partners. In fact, this demand has long been very large but sometimes the parties cannot find each other. Many enterprises want to develop projects but it is very difficult to find units with suitable land funds, especially agricultural land funds.
For individuals, it is also easy to buy and sell land use rights through the floor, avoiding crisis, price fever, price pressure... Meanwhile, the state is also very convenient in managing real estate transactions, avoiding loss of tax money, wasting time on verification procedures, valuation... "In my opinion, we can imagine the land use rights trading floor similar to the current commodity trading model, in which the Ministry of Natural Resources and Environment is the management agency, and the Department of Natural Resources and Environment of localities will participate in the operation" - Mr. Tran Khanh Quang said.
Experts and businesses all agree that the policy of establishing a land use rights trading floor is very good for the real estate market. Photo: TAN THANH
The most important thing is the operating mechanism.
From the perspective of enterprises, Mr. Ngo Duc Son said that when researching the establishment and operation of the land use rights trading floor, the management agency needs to consider a number of issues such as: how to organize the apparatus? In the case of assets being land use rights with house ownership, how are transactions conducted? Are people and enterprises required to buy and sell land use rights through the floor? Laws and regulations related to land, notarization, housing, commerce, etc. are still open.
Dr. Pham Anh Khoi is concerned about some other issues such as: How is the floor operating mechanism? Who will supervise? Is the floor socialized or managed by the state? "The important thing is publicity and transparency to attract people, businesses, and organizations with land use rights assets to participate. In addition, there needs to be a reasonable market-based incentive and incentive mechanism that will attract participants in the land use rights trading floor, including foreign investors. This will be very good for the Vietnamese real estate market" - Mr. Khoi acknowledged.
Meanwhile, Mr. Pham Lam, Vice President of the Vietnam Real Estate Brokers Association, said that it is too early to assess the effectiveness and impact of the land use rights trading floor when the related contents have not yet been demonstrated. However, the Government's request for relevant ministries and branches to study the establishment of a land use rights trading floor is considered a new, breakthrough step, promoting a more transparent and convenient real estate market. "The biggest problem of this trading floor is the reasonable and reliable operating mechanism in the context of many issues related to the law for real estate assets that are still incomplete," said this expert.
Dr. Pham Anh Khoi suggested that the government should promote the removal of difficulties and obstacles for real estate before moving towards establishing a trading floor. Because this is a rather long story for the property rights of people and businesses to be established before putting land use rights on the trading floor.
"The important thing is still the operating mechanism, techniques, and legality to make everything go smoothly. The policies that the Government has put forward are all good for the market, but sometimes they create a mechanism of asking and giving. If the buying and selling of land use rights through the exchange has a mechanism of asking and giving, it will certainly be difficult for the participants. Therefore, once the Government has organized and implemented the land use rights exchange, it needs to have the best mechanism for participants, attracting them by encouraging them, not forcing them, which can easily lead to a situation of transactions for the sake of it, not in line with the original orientation."
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