A state doesn't exist and therefore cannot own land itself. Things that compose a state that actually exist: Buildings, chairs, computers, some paper, etc and individuals. So obviously the individuals that compose the state are the ones that would own the land.

Logically your fundamental argument seems to be: A state is the only actor capable of owning land.

However a state is composed of individuals therefore your argument is individuals are the only actors capable of owning land.

Your plan appears to contain an internal contradiction. Individuals are not capable of owning land therefore we need individuals to own land.