Government to propose Land Law draft easing land recovery procedures

A draft resolution introducing mechanisms to remove complexities in the implementation of the Land Law will be submitted to the National Assembly (NA) this week. The resolution will be presented on November 18, with a group discussion session scheduled for the morning of November 19.

The submission by the government proposes adding three specific cases in which the state can recover land for socioeconomic development in the national and public interest. It also consolidates rules on land recovery for national defence and security, for socioeconomic projects, and based on the progress of investment projects, including provisions on compensation, support, and resettlement.

The draft proposes that land prices for compensation and resettlement be calculated based on the official land price list and applicable adjustment coefficients. Land users would have the option to pay rent either as a one-time lump sum or annually, except for land used by public non-business units.

The government is also proposing regulations on the basis for calculating land use fees, land rental fees, and compensation when the State recovers land. These fees are calculated based on the land price list, the land price adjustment coefficient, and the percentage for calculating land use fees for each type of land according to the user and form of land use.

At a meeting on November 5, Phan Van Mai, Chairman of the NA’s Committee for Economic and Financial Affairs, said, “The committee basically agreed with the necessity of issuing an NA resolution on policies for addressing problems during the implementation of the 2024 Land Law for the reasons as mentioned by the government.”

“The committee recommended further reviewing the draft to ensure compliance with the constitution, avoid contradictions or overlaps with existing laws, and guarantee feasibility, fairness, transparency, and protection of citizens’ rights and interests without triggering disputes or complaints,” he added.

According to the government, after more than a year of implementing the 2024 Land Law and guidance documents, the new policies have yielded initial positive results, helping unlock land resources for socioeconomic development. However, as new development requirements are arising in the new period, it is necessary to issue an NA resolution to continue institutionalising the Party's viewpoints and directions while tackling certain challenges.

Remittance flows to southern Vietnam in particular continue to grow strongly, with early implementation of the new Land Law expected to drive real estate growth towards 2025.

Housing supply is expected to increase significantly following the implementation of new real estate laws in August, creating numerous opportunities for investors and developers.

Starting August 1, 2024, three key laws - the 2024 Land Law, the amended Housing Law, and the amended Real Estate Business Law came into effect.

While increased investment is anticipated in transit-oriented development, spurred by the new Law on Capital City and the Land Law, further enhancements are necessary to unlock the full potential of such projects.

With the current amendments of the 2024 Land Law, a foreign company leasing land from the state with annual rent payments will see the adjusted rent raised significantly higher. This imposes a sudden financial burden on the business, and is an issue many enterprises will have to face.