KEY CHANGES OF THE LAND LAW 2024

The Land Law No. 31/2024/QH15 was passed by the National Assembly on 18 January 2024 (the “Land Law 2024”) to address and remove outstanding obstacles under the Land Law 2013, and to adjust regulations in line with the economic context as well as evolving perspectives on sustainable development and environmental protection. Below are several notable changes introduced by the Land Law 2024, which takes effect from 01 January 2025, except that Articles 190 and 248 take effect from 01 April 2024, and Clause 9 Article 60 takes effect from the date Resolution No. 61/2022/QH15 expires.

New regulations related to land expropriation

First, in order to mobilize land resources, enhance land-use efficiency, develop socio-economic infrastructure in a modern direction, implement social welfare policies, protect the environment, and preserve cultural heritage, Article 79 of the Land Law 2024 specifies 31 specific cases and 01 other case in which the State recovers land to implement socio-economic development projects for national and public interests, including:

1.      Construction of transportation works.

2.      Construction of irrigation works.

3.      Construction of water supply and drainage works.

4.      Construction of solid waste treatment works.

5.      Construction of energy works and public lighting works.

6.      Construction of oil and gas works.

7.      Construction of postal, telecommunications, and information technology infrastructure works.

8.      Construction of traditional markets and wholesale markets.

9.      Construction of belief works, including communal houses, temples, shrines, and other lawful belief works.

10. Construction of religious works.

11. Construction of public amusement, entertainment, and community activity facilities.

12. Construction of headquarters of the Communist Party of Vietnam, State agencies, the Vietnam Fatherland Front, socio-political organizations, socio-political-professional organizations, social-professional organizations, social organizations, and other organizations as prescribed by the State.

13. Construction of headquarters or representative offices of public non-business units affiliated with the Communist Party of Vietnam, State agencies, and socio-political organizations.

14. Construction of cultural facilities, historical and cultural relics, and scenic sites.

15. Construction of medical facilities and social service facilities established or permitted to operate by the State.

16. Construction of educational and training institutions established or permitted to operate by the State.

17. Construction of physical training and sports facilities established or permitted to operate by the State.

18. Construction of science and technology facilities established or permitted to operate by the State.

19. Construction of diplomatic facilities.

20. Construction of public service works for environmental treatment, biodiversity conservation, meteorology, hydrology, registration and inspection, and animal and plant quarantine.

21. Implementation of social housing projects and housing projects for the people’s armed forces.

22. Implementation of industrial park projects.

23. Implementation of large-scale concentrated agricultural, forestry, fishery, and seafood production and processing zone projects.

24. Land reclamation activities.

25. Mineral exploitation activities.

26. Projects in surrounding areas of transport connection points and transport routes with development potential.

27. Implementation of urban development projects with mixed-use functions.

28. Cemeteries, funeral homes, crematoria, and ash storage facilities.

29. Implementation of projects for allocation of residential land and production land for ethnic minorities.

30. Construction of above-ground works serving the operation, exploitation, and use of underground works.

31. Implementation of projects approved or decided on investment policy by the National Assembly or the Prime Minister in accordance with law.

32. Other cases of land recovery to implement projects or works for national or public interests.

Second, the Land Law 2024 supplements additional compensation methods when the State recovers land. Specifically, pursuant to Clause 2 Article 91 of the Land Law 2024, there are four compensation methods: (i) allocation of land with the same land-use purpose as the recovered land; (ii) monetary compensation; (iii) compensation with other land having the same land-use purpose as the recovered land; and (iv) compensation with housing. Compensation methods are applied depending on local conditions and the needs of the land users whose land is recovered. At the same time, land users whose land is recovered may choose monetary compensation according to their registered preference when the compensation, support, and resettlement plan is prepared, even in cases where compensation is provided in land or housing.

Third, pursuant to Clause 6 Article 91 of the Land Law 2024, the approval of compensation, support, and resettlement plans and the arrangement of resettlement must be completed before the issuance of the land recovery decision. This means that resettlement must be completed in advance, instead of merely completing the construction of housing or infrastructure of resettlement areas and issuing the land recovery decision and approval of compensation, support, and resettlement plans on the same day as provided under the Land Law 2013.

Fourth, pursuant to Clause 7 Article 91 of the Land Law 2024, when the State recovers land, if the remaining area of a land parcel is smaller than the minimum area prescribed by the provincial People’s Committee, and if the land user agrees to recovery, the competent People’s Committee shall recover such land area, provide compensation and support, and manage such land area in accordance with law.

Fifth, in addition to compensation for costs related to the land recovery process such as compensation for property damage and investment costs in recovered land, the Land Law 2024 supplements other forms of support compared to current regulations. Specifically, Article 108 of the Land Law 2024 adds other support items for persons whose land is recovered, such as:

·         Support for relocation of livestock;

·         Support for dismantling, demolition, and relocation of assets attached to land that are construction works built under time-limited construction permits which have expired at the time of land recovery.

In addition, based on actual local conditions, the provincial People’s Committee shall decide on other support measures and levels to ensure housing, livelihood stabilization, and production for persons whose land is recovered and asset owners, on a project-by-project basis.

New regulations related to land finance / land pricing

First, the Land Law 2024 abolishes the Government’s land price framework, and instead provides specific principles, bases, and methods for land valuation. Accordingly, land price tables shall be developed annually, with the first land price table to be promulgated and applied from 01 January 2026, and adjusted, amended, and supplemented from 01 January of each subsequent year.

Second, Article 160.1 of the Land Law 2024 clearly stipulates the time for determining land prices and the time for calculating land-use levy and land rent for each case of land allocation, land lease, permission for change of land-use purpose, extension of land-use term, or change of land-use form that adjusts land allocation or land lease decisions resulting in changes in land area, land-use purpose, or land-use term.

Third, Article 160.4 of the Land Law 2024 allows localities that already have land price tables down to each land parcel based on value zones and standard land parcels to use the land price table at the time of land valuation to apply specific land prices. This provision encourages localities to strengthen investment in funding, human resources, and solutions to develop land databases in accordance with the law.

Specific regulations on land allocation and land lease through bidding

Compared with the Land Law 2013, the Land Law 2024 supplements regulations on “land allocation and land lease through bidding for selection of investors to implement land-use investment projects” (Article 126) applicable to “land not yet cleared”, whereby “the winning bidder investor is responsible for advancing capital to carry out compensation, support, and resettlement at the request of the competent State authority”. Within 36 months from the date of issuance of the decision recognizing the bidding result, or another period as agreed in the contract signed with the competent State authority, the competent People’s Committee must complete compensation, support, and resettlement in order to allocate or lease land to the winning investor. This provision helps resolve obstacles in bidding activities and remove previous conflicts between the Land Law 2013 and the Bidding Law 2013.

Accordingly, the State allocates land with land-use levy collection or leases land through bidding for selection of investors to implement land-use investment projects in the following cases:

·         Investment projects for construction of urban areas or rural residential areas where the provincial People’s Council decides on land allocation or land lease through bidding for selection of investors to implement land-use investment projects.

·         Land-use investment projects falling under cases where the State recovers land for socio-economic development for national or public interests and not falling under the above case, but required to conduct bidding for selection of investors in accordance with sectoral management laws.

In addition, foreign investors participating in bidding for selection of investors to implement land-use investment projects must satisfy the following conditions: (i) being eligible subjects for land allocation or land lease by the State; (ii) satisfying conditions applicable to land allocation or land lease for implementation of investment projects; and (iii) meeting conditions in accordance with bidding laws. If winning the bid, the investor must establish an economic organization to be allocated or leased land to implement the project in accordance with Government regulations consistent with investment laws, bidding laws, and other relevant laws.

Regulations on use of land to implement housing projects through agreements on transfer of land-use rights or existing land-use rights

The Land Law 2024 permits the use of land to implement housing projects through agreements on transfer of land-use rights or existing land-use rights. According to the spirit of Point b Clause 1 and Clause 6 Article 127 of the Land Law 2024, commercial housing projects may be implemented through agreements on transfer of land-use rights for residential land; and existing land-use rights may be used to implement commercial housing projects for residential land or residential land combined with other land. This is a very open provision on land use for socio-economic development projects through agreements on transfer of land-use rights or existing land-use rights for most socio-economic development projects, including social housing projects, except for certain restrictions applicable to commercial housing projects. This provision will facilitate land use and promote national development.

Specifically, cases allowing the use of land to implement socio-economic development projects through agreements on transfer of land-use rights include:

·         Cases where projects do not fall under land recovery for socio-economic development for national or public interests.

·         In cases of using land to implement commercial housing investment projects, agreements are only permitted for transfer of residential land-use rights.

·         Cases not using State budget capital and falling under land recovery for socio-economic development for national or public interests, where the investor chooses the option of agreement on transfer of land-use rights and does not propose land recovery.

In addition, the use of land to implement socio-economic development projects through agreements on transfer of land-use rights must satisfy the following conditions:

·         Consistency with the district-level land-use planning that has been approved and publicly announced;

·         The investor must satisfy conditions applicable to using land to implement commercial housing investment projects, whereby agreements on transfer of residential land-use rights are permitted;

·         Having written approval of the provincial People’s Committee for the agreement on transfer of land-use rights to implement the project.

Expansion of land-use rights of overseas Vietnamese

Article 4 of the Land Law 2024 expands the scope of land users to include: “3. Domestic individuals and overseas Vietnamese who are Vietnamese citizens (hereinafter referred to as individuals); 6. Persons of Vietnamese origin residing overseas”. The Land Law 2024 thus broadens the category of land users compared to the Land Law 2013, thereby more accurately defining the rights and obligations of overseas Vietnamese and persons of Vietnamese origin residing overseas. This contributes to consistency with Clauses 3 and 4 Article 3 of the Nationality Law 2008, which defines overseas Vietnamese as including Vietnamese citizens and persons of Vietnamese origin residing and living overseas.

Accordingly, overseas Vietnamese have rights and obligations similar to those of domestic individuals. The expansion of rights for overseas Vietnamese helps address previous inadequacies, such as the need for overseas Vietnamese to rely on relatives in Vietnam to stand in their name for real estate transactions. At the same time, it attracts remittances from overseas Vietnamese and promotes investment and business activities of this group.

In addition, pursuant to Point h Clause 1 Article 28 of the Land Law 2024, persons of Vietnamese origin residing overseas who are permitted to enter Vietnam are entitled to purchase or lease-purchase houses associated with residential land-use rights, receive residential land-use rights in housing development projects; inherit residential land-use rights and other types of land within the same land parcel with housing in accordance with civil law; and receive gifts of houses associated with residential land-use rights from persons who are heirs in accordance with civil law.