Vietnam’s National Assembly (NA), the country’s highest legislative body, has passed long-delayed amendments to the Land Law, with specifics on land revocations and annual quasi-market price adjustments.
The passage was endorsed by 432 out of 477 NA deputies present at a three-day extraordinary parliamentary session ending Thursday. The new Land Law with 16 chapters and 260 articles will take effect on January 1, 2025.
The ratification, originally scheduled for an ordinary NA plenum last November, was realized after four plenary sessions and two conferences of full-time legislators that took into account more than 12 million comments from citizens, and opinions of multiple experts, scholars, organizations and other stakeholders, noted Chairman of the NA’s Economic Committee Vu Hong Thanh.
Land pricing
Under the new law, land price frames will be updated annually by provincial people’s councils or the central government to correctly reflect market movements.
The existing legislation stipulates that such price frames are set every five years and its coefficient “K” is adjusted yearly, which has not been complied with strictly in practice, said the economic committee, which assessed the new land bill.
It enjoins the government to propose other pricing methods that are not prescribed by law, after receiving the consent of the NA’s Standing Committee.
To ensure the quality of land price frames, state management agencies at all levels need to further improve their capacity in the process of law enforcement, complete the building of digital databases and national information systems on land to directly serve the management and use of land, Thanh said.
Regarding land pricing, legislators agreed on four methods – comparative, income-based, added value and land price adjustment coefficient. The added value method was retained after intense debate.
This valuation method is applied in case a land plot or land area meant to be used for an investment project does not qualify for the comparative or income-based methods but whose future revenue and project costs can be estimated.
The NA standing committee felt that in the context of a developing Vietnamese economy, this method was necessary, especially given the unavailability of information on similar projects that have been formed and traded wherein other valuation methods could be used.
32 land revocation cases
Under Vietnamese law, land belongs to all the people of Vietnam, and the state is the representative of the people exercising the ownership rights. It has the right to possess, use and dispose of land nationwide under law and planning provisions. When the state allocates land to land users, it only assigns them land use rights.
The bill specifies 32 cases in which land can be revoked to serve socioeconomic projects to serve public and national interests.
Inter-alia, the state can reclaim land to build works meant for traffic; irrigation; water supply; waste treatment; energy, public lighting; oil and gas; postal and telecommunications infrastructure; markets, wholesale markets; religions and religious beliefs; public entertainment and recreation areas, community activities; headquarters of the Communist Party of Vietnam, state agencies, and the Vietnam Fatherland Front.
The state also has the right to revoke land for purposes of culture; medical facilities and social services; education; fitness and sports facilities; science and technology; diplomacy; environmental treatment, biodiversity conservation, meteorology, hydrology; social housing projects, housing for the people's armed forces; industrial parks; high-tech zones; mining; cemeteries; and projects already approved by the NA and the prime minister.
Pilot commercial housing projects
According to Thanh, the new land bill allows the government to study and develop a pilot project to submit to competent authorities and the National Assembly for consideration and adoption of a resolution that would allow pilot implementation of commercial housing projects having rights to use residential land acquired at an agreed price close to market prices.
This openness is expected to increase supply of commercial housing in the country, albeit at higher prices.
In November 2023, the NA had passed revised versions of the Law on Housing and Law on Real Estate Business, which both will take effect on January 1, 2025.