Vietnam’s 2024 Land Law: Significant Amendments and Key Changes
Vietnam’s amended Land Law of 2024 brings significant changes to land valuation, rent payments, land use terms, and dispute resolution mechanisms in the country. With a focus on modernizing land management practices and promoting fairness, the amended law aims to foster sustainable socio-economic development in the country.
During its 5th extraordinary session on January 18, 2024, the 15th National Assembly (NA) formally ratified the 2024 version of Vietnam’s Land Law.
Spanning 16 chapters and comprising 260 articles, the amended land law outlines details concerning land ownership, state representation of collective land ownership, unified land management, and the rights and obligations of citizens and land users across the nation’s territory.
The 2024 Vietnam Land Law is scheduled to take effect on January 1, 2025, formally superseding the 2013 version known as Land Law No. 45/2013/QH13. However, there are exceptions to this transition, which include the following provisions:
- Article 190: Regulations concerning maritime encroachment activities, which will take effect in April 2024.
- Article 248: Regulations amending several articles of the Law on Forestry, also anticipated to take effect in April 2024.
- Article 60.9: Regulations pertaining to the formulation and approval of land use planning, which will be effective from the expiry date of Resolution No. 61/2022/QH15 adopted by the NA on June 16, 2022.
The amended law garnered substantial support within the NA, with 432 out of 477 deputies voting in favor, representing 87.63 percent of total deputies. Recognizing its multifaceted impact on diverse sectors and communities, Chairman of the NA Economic Committee, Vu Hong Thanh, emphasized the law’s significance and complexity during its deliberation stages. Throughout its legislative journey, the proposed amendments underwent review at four NA sessions, two conferences of full-time deputies, and eight official meetings of the Standing Committee. Crucially, the process involved different insights from agencies, organizations, experts, scientists, and a remarkable 12 million public opinions, highlighting the collaborative nature of the legislative framework.
In this article, we delve deeper into the key changes introduced by the amended land law.
What are the key changes introduced in Vietnam’s 2024 Land Law?
Elimination of the land price framework
The amended land law introduces significant changes to land valuation and pricing mechanisms in Vietnam, departing from the previous framework. Notably, it abolishes the periodic issuance of land prices, which had struggled to keep pace with the dynamic market value of land over time. Instead, the new legislation establishes an annual land price list to better align land prices with current market conditions. Provincial People’s Committees will be responsible for proposing adjustments to this list on an annual basis, thereby ensuring that valuations accurately reflect evolving market trends.
Moreover, the amended law refines the land valuation methodologies outlined in Decree 44/2014/ND-CP. While the previous decree offered five valuation methods, including direct comparison and income-based approaches, the amended law removes the subtraction method and provides comprehensive guidelines for applying the remaining four methods. By specifying the circumstances under which each method is to be used, the amended law aims to enhance transparency and consistency in land valuation practices nationwide.
These revisions signify a concerted effort to modernize land valuation processes, with the ultimate goal of ensuring that prices more accurately reflect market dynamics while fostering fairness and efficiency in land transactions.
Changes in land rent payments
Under the amended law, significant changes are introduced regarding the payment of land rent. Previously, the legislation lacked clear provisions for land tenants to switch from one-time payments to annual payments. However, Article 30.2 now allows economic organizations, individuals, Vietnamese expatriates, and economic organizations with foreign investment capital to opt for annual land rent payments.
This flexibility aims to accommodate the needs of land users, yet questions arise regarding the refund of one-time land rent payments when switching to annual payments. The regulation specifies that “paid land rent is deducted from the annual land rent payable,” suggesting that the paid land rent remains with the State, potentially impacting enterprise cash flow dynamics.
The amended law allows upfront land rental payments in the following situations:
- Lands designated for agriculture, forestry, aquaculture, and salt production projects;
- Lands allocated for industrial parks, high-tech parks, worker accommodation, and public or commercial purposes like tourism and office activities; and
- Lands intended for constructing social housing for rent, as per relevant laws.
For existing land users paying upfront or annual rents before the new law takes effect, they can continue with their chosen payment method for the remaining lease terms. However, there are exceptions:
- Those leasing land annually but eligible for upfront payments can switch to upfront payments for the remaining term, with the fee recalculated.
- Users leasing land upfront for the entire term may opt for annual payments, with previously paid fees deducted from the annual rental fee.
Changes in land use term for housing projects
The amended law also revises regulations concerning land use terms for housing projects. While the previous version of the legislation allowed buyers of housing attached to land use rights to use land with long-term stability, the 2024 version removes this provision.
Additionally, Article 148.6 introduces the issuance of Certificates of Land Use Rights and Ownership of Assets attached to land for residential properties, implying a possibility for buyers to have long-term stable land use rights in housing projects.
Limitations on land fund for commercial housing projects
The amended law imposes limitations on the land fund available for commercial housing projects. Investors can obtain land use rights through state land recovery or agreements on receiving the transfer of land use rights from other land users.
Notably, Article 79 expands land recovery cases, potentially impacting smaller commercial housing projects that do not meet specific criteria. Moreover, the requirement for detailed planning and other conditions for auctioning land use rights adds complexity to the process.
Expanded dispute resolution mechanisms
Articles 235.1 and 236.5 introduce commercial mediation and commercial arbitration as additional methods for resolving land disputes. This addition provides enterprises with more options to address disputes arising from commercial activities related to land, aligning with legal frameworks for commercial arbitration and mediation.
The adoption of the amended law marks a significant milestone in Vietnam’s legal landscape, reflecting the legislative body’s commitment to establishing a robust framework for addressing land-related issues.
After undergoing thorough drafting and assessment processes, the law has been ratified by the NA, showcasing a broad vision aimed at facilitating efficient land exploitation and effective state management. While it will take time to fully evaluate the practical implications of the new law, initial indications suggest positive changes for land users, particularly economic organizations in the real estate sector.
In essence, the amended law represents a concerted effort to modernize land management practices in Vietnam and promote fairness and efficiency in land transactions. As stakeholders adapt to the changes, the law sets the stage for a more transparent and dynamic land market, fostering sustainable socio-economic development in Vietnam.
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