PARLIAMENT FORMALLY ADOPTS LAND LAW: NEW HIGHLIGHTS AND IMPACTS

The Land Law 2024 basically untangled the difficulties, the “knots” in practice. Within the scope of this article, Lawyers, MSc. Pham Thanh Tuan — Real Estate Legal Specialist, WeLand Legal Director mentioned some major, important changes, which are the highlights of the Land Law 2024.

1. VIETNAMESE CITIZENS RESIDING ABROAD HAVE FULL RIGHTS IN RELATION TO LAND

Compared to the Land Law 2013 (Article 5) which distinguishes the right of access to land between “domestic individuals” and “Vietnamese residing abroad”, Clause 3, Article 4 of the Land Law 2024 stipulates that Vietnamese who reside abroad who are citizens of Vietnam have full land-related rights as Vietnamese citizens residing in the country.

The new regulation is expected to contribute to boosting investment growth and attracting remittances from millions of Vietnamese citizens residing abroad, creating resources for the country's economic development.

With regard to the “foreign” factor, Clause 46, Article 3 of the Land Law 2024 defines the land use entity as “economic organization with foreign investment capital”, in line with the provisions of the Investment Law 2020, to correct the inconsistencies in the concept of “foreign enterprise with foreign investment capital” in Clause 7, Article 5 of the Land Law 2013 (with inconsistent content, outdated with these provided for in the Investment Law 2020).

2. NEW POINT IN THE PRICE OF LAND

Get rid of the land price bracket

The Land Law 2024 removed the land price framework in order to remove the administratively imposed land price management mechanism to build land price lists close to the prevailing market value. Help local communities to actively and flexibly build, apply land price lists, overcome the market situation with the existence of a mechanism of two land prices, according to the framework issued by the State, and the actual transaction price for land.

Specify 4 methods of land valuation and application cases

Article 158 of the Land Law 2024 provides for the principles, grounds and methods of land valuation. The law provides for 4 methods of determining land prices, including: comparative method, income method, surplus method and land price adjustment coefficient method (excluding subtraction method) and specifies the conditions and criteria for applying each method.

The use of which method in which cases, for which type of land is clear, specific, avoids causing difficulties for the authority entrusted with the valuation of the land. At the same time, minimize the risks in the process of organizing local implementation.

3. LAND RECLAMATION FOR SOCIO-ECONOMIC DEVELOPMENT IN THE NATIONAL AND PUBLIC INTEREST

Compared to the provisions of Article 62 of the Land Law 2013, Article 79 of the Land Law 2024 provides detailed and clear provisions on the cases of State land reclamation projects for socio-economic development in the national and public interest, which facilitates the practical application of the authorities.

The Land Law 2024 still provides for investment projects for the construction of urban areas; rural residential projects (Clause 27, Article 79) are subject to the State's land reclamation, in accordance with the direction of inheritance stipulated by the Land Law of 2013. But the technical design clarifies the nature of the urban area project that falls under the consideration of recall as an investment project for the construction of an urban area with mixed capacity, synchronization of technical infrastructure, social infrastructure with housing in accordance with the legislation on construction for new construction or renovation, urban redevelopment.

Paragraph 31, Article 79 of the Land Law 2024 provides for land reclamation cases for projects that have been approved by the National Assembly, the Prime Minister and decided on the investment initiative. This regulation is expected to address the difficulties in the implementation of key projects by economic organizations (including those with foreign investment capital). Thus, it is possible to attract investment capital for F1 formula track projects, racetracks; service trade projects such as hotels, shopping centers, etc., which motivate economic development throughout the country.

In addition, in order to create a legal basis for the implementation of projects in the vicinity of transport interconnection points and transport routes with potential development, to regulate land differences due to planning changes, paragraph 26 of Article 79 provides for the recovery of land by the State for the implementation of projects in the vicinity of transport interconnection points and transport routes with potential development. The above regulation specifies the orientation in Resolution No. 18-NQ/TW on “the specific regulation of the effective exploitation of land funds in the vicinity of infrastructure works in accordance with the planning, land use plan and priority policy for persons with reclaimed land allotted land or purchase of houses on the area of reclaimed land extended in accordance with the law”.

4. COMPENSATION WHEN THE STATE RECOVERS LAND

Variety of forms of compensation

The Land Law 2024 provides for a variety of forms of compensation in money, housing or land of the same purpose or other use if the person receiving the land is in need and the local has conditions for the land fund. Unlike the provisions of the Land Law 2013, households and individuals can only be compensated with land of the same purpose or in money.

In particular, Article 96 states, households and individuals who have been repossessed of agricultural land may be compensated with housing, land with a purpose other than that of the reclaimed land or in money. Article 99 states that, when reclaiming non-agricultural land, it is still possible to compensate with housing or land with a purpose other than that of the reclaimed land.

These regulations help localities without land funds for the same purpose as reclaimed land to be compensated with other land, reducing the pressure on the State budget when paying compensation in cash.

For residents with reclaimed land, the provision of compensation by means of land with a purpose other than that of reclaimed land creates conditions for people with reclaimed land to stabilize their lives and develop production. This provision is especially useful in the case of the reclamation of agricultural land, residents receive compensation with commercial land, services that will make it easier for the person with the reclaimed land to adapt when changing careers and jobs.

Decentralization of authority to recover land according to the purpose of recovery

Article 83, Land Law 2024 introduces a new regulation on land reclamation jurisdiction and decentralizes the authority to recover land according to the purpose of recovery, relying less on the criteria of the subject being withdrawn (whether individuals or organizations using the land) as in the previous Land Law 2013. Specifically:

The provincial People's Committee shall recover land for domestic organizations, religious organizations, economic organizations with foreign investment capital and some other entities in cases of: revocation due to violation of land laws; termination of land use; voluntary return of land users; there is a risk of threat to human life.

The district-level People's Committee carries out land reclamation (regardless of land use subject) in cases: land reclamation for defense, security purposes, socio-economic development for national and public benefit. Or recover land with households or individuals who use land that (i) violate land laws or (ii) voluntarily return it, posing a threat to human life. Thus, the district-level People's Committee is more decentralized in the land reclamation authority.

No need to arrange public property

Clause 3, Article 83 of the Land Law 2024 stipulates that if land is recovered in accordance with the Land Law, it is not necessary to arrange public property as stipulated by the Public Property Law, accelerating the process of compensation of GPMB projects.

5. LAND FUND IMPLEMENTING COMMERCIAL HOUSING PROJECTS

Institutionalizing Resolution No. 18-NQ/TW on the policy of land allotment and leasing mainly through land use rights auctions, land use project tenders, Land Law 2024 provided for investment projects in urban areas and commercial housing projects selected by the Investor according to the bidding and auction mechanism.

In the case of investor selection not through tenders and auctions, the Land Law 2024 stipulates that enterprises can only implement commercial housing projects through the mechanism of agreement on the receipt of the right to use “residential land” (point b, clause 1, Article 127), i.e. enterprises agree to receive transfers and contribute 100% of “residential land”, without other types of land.

If an enterprise has existing land funds, a commercial housing project may be carried out if it has all or part of “habitable land”; that is, other types of land that are not “habitable land “are still allowed (Clause 6, Article 127).

Thus, the provisions of the Land Law 2024 will contribute to ending the situation of investors who go to “buy” land and then transfer their purpose to commercial housing projects because it is very difficult for any land fund to meet the criteria of having the entire “habitable land”. The law only addresses the transition for investors who are managing the land fund and have a new “residential land” part implemented in commercial housing projects.

6. NARROW THE CASE OF LAND LEASED BY THE STATE TO COLLECT ONE-TIME LAND RENT

If the Land Law of 2013 allows the person who is leased by the State to choose the type of land leased to pay once for the entire lease period or rent the land paid annually, then the Land Law 2024 narrows the cases where the State leases land to collect the land rent once for the entire lease period:

Paragraph 2 of Article 120 provides for 3 groups of cases to be applied in the form of one-time lease of land for the entire lease period (e.g. investment projects in agricultural production, forestry, aquaculture, salt-making; land in industrial parks, industrial clusters, high-tech parks; land used for public purposes for business purposes; use of commercial land, services for tourism activities, office business...).

The remaining cases will apply in the form of annual paid land lease.

In order to facilitate the cases of land leases collecting land rent annually, the Land Law 2024 also allows land tenants to be granted the right to transfer the right to lease land in an annual paid land lease agreement, and the transferee of the lease rights to inherit the rights and obligations of the land user (Clause 37, Article 3).

At the same time, it allows the purchaser of the property associated with the land and the right to lease in the land lease to continue to use the land for its intended purpose during the remaining period of use of the land, to continue to deduct the money paid in advance without being deducted (Article 46).

The provision on the right to lease in the annual land lease agreement helps to synchronize the cases of transfer, capital contribution... assets on land leased annually are allowed to continue to rent land paid annually, which was an unclear point in the previous Land Law 2013.

7. SYNCHRONIZATION OF THE LEGISLATION ON THE SELECTION OF INVESTORS WITH THE REGULATIONS ON LAND ASSIGNMENT AND LAND LEASE

Synchronization with legislation on investment

In order to synchronize with the legislation on investment and to correct the inadequacies of the previous Law 2013 (it does not provide for land allocation in the case of tendering, investor approval, as stipulated in the Investment Law 2020), the Land Law 2024 specifies in detail the cases and conditions of land allotment in each specific form: land allotment, leasing through auction (Article 125), tender selection of houses investment (Article 126) or cases where land will be delivered not through tenders or auctions (Article 124).

This content contributes to increasing transparency for the real estate market, creating equity in access to land by enterprises.

Foreign investors must establish an economic organization to implement the project

Paragraph 6, Article 126 of the Land Law 2024 stipulates that foreign investors must establish an economic organization to implement the project (the same as a project enterprise for PPP projects) and assign the Government its provisions in accordance with the legislation on investment, the law on tendering and other relevant legislation.

Allows the creation of an economic organization to carry out the project

The law also allows land allotments and land leases to successful investors or economic organizations to established investors (point d, Clause 7, Article 126). The new regulation allows the establishment of an economic organization to implement the project to help investors to specialize their investment activities, enhance their expertise in the management and operation of specific projects

Cancellation of the bid after 6 months if the investor wins the project bid does not pay enough capital

In addition, it is stipulated that the successful investor of the project must pay sufficient capital to carry out compensation, assistance and resettlement within 6 months from the date of receipt of the request, otherwise the tender will be canceled. The above regulation contributes to the promotion of investors who need to prepare well the financial resources for the project, thereby promoting the progress of compensation for project clearance (Clause 8, Article 126).

8. TRANSFER OF REAL ESTATE PROJECTS

In order to be consistent with the Law on Real Estate Business 2023, the Land Law 2024 allows the transferor who does not have a certificate of land use rights (newly decided to assign land or lease land) when transferring a Real Estate Project to an organization in accordance with the law on real estate business, the State will not withdraw the land, but will issue a decision to assign the land and lease the land always to the transferee concession of the project in accordance with Clause 3 of Article 142.

At the same time, the Law additionally provides for the transfer of projects in the implementation of project transfer in Clause 15 of Article 260: “Enterprises with foreign investment capital in accordance with the provisions of the Real Estate Business Law No. 66/2014/QH13, which has been amended and supplemented with certain provisions in accordance with the Investment Law No. 61/2020/QH14, are carrying out the procedure for receiving the transfer of all or part of real estate projects, but by the date of this Law entering into force without completing the land procedures for the project or part of the project receiving the transfer, the competent state agency to carry out the procedure of land assignment, lease the land to the transferee, issue a certificate of land use rights and ownership of the property associated with land as provided for by this Law. The recipient of the transfer of all or part of the real estate project shall inherit the rights and obligations of the land of the transferor of the project.”

This regulation facilitates the land procedure when carrying out the transfer of real estate projects and ensures the financial obligation for land inherited from the transferor to the transferee, which is an unclear point in the Land Law 2013.

9. ISSUANCE OF LAND USE CERTIFICATES FOR HOUSEHOLDS, INDIVIDUALS

The issuance of land use certificates (Certificates) to households and individuals using stable land without land documents, without disputes has been previously regulated in the Land Law of 1993, 2003, 2013. After that, each amendment of the Land Law extends the deadline for issuing certificates.

Until the Land Law 2024 (Clause 3, Article 138) continues to regulate the period of land use, according to which households and individuals who use land, who do not have documents on land use rights, do not violate land law, who do not fall under the jurisdiction of land assignment before July 1, 2014 will be issued a Certificate.

The new regulation helps to create favorable conditions, meet the legitimate requirements of the population in issuing certificates. The regulation also contributes to accelerating the progress of issuing Certificates in the country.

10. ON PLANNING, LAND USE PLANS

Provincial-level land use planning

In addition to defense and security land use planning, Article 61 of the Land Law 2024 defines the system of land use planning and planning at 3 levels: planning, land use plan at national level, provincial level and district level. Previously, provincial-level land use planning was integrated into the content, allocation and zoning of land in provincial planning according to the Planning Law 2017.

Province-level land use planning regulations contribute effectively in land allocation and zoning activities, contribute to the development of defense, social, economic security, environmental protection and climate change.

Ensure synchronicity between planning types

Clause 5 of Article 65 stipulates that centrally located cities that have approved urban planning do not have to draw up provincial-level land use planning, but on the basis of general planning to draw up provincial-level land use planning. Districts, cities and towns that have approved urban planning are not required to draw up a district land use plan (Clause 4, Article 66).

Overcoming the “hanging” planning situation

Paragraph 7 of Article 76 provides for the areas of land that have been identified in the annual land use plan of the district level for the purpose of recovery or transfer of purpose for which after two consecutive years (the Land Law of 2013 stipulates that this period is 03 years) without revocation or transfer of purpose, the competent authority must adjust or cancel the land use plan.

Making it easier for individuals to transfer land use

Clause 5, Article 116 of the Land Law 2024 requires that the grounds for transfer of purpose be based on district-level land use planning. The new regulation will facilitate and overcome the previous difficulties when individuals transfer the purpose of land use on the basis of many bases such as: planning, land use plan, construction planning, urban planning, rural residential point planning, rural settlement planning, new rural commune construction planning stipulated in Clause 2, Article 3 of Decree No. 43/2014/ND-CP as amended.

11. ALLOW THE ECONOMIC ORGANIZATION TO RECEIVE THE TRANSFER OF AGRICULTURAL LAND USE RIGHTS

Article 45 of the Land Law 2024 allows economic organizations to receive the transfer of agricultural land use rights. However, there must be an agricultural land use plan approved by the District People's Committee; allow individuals who do not directly produce agriculture to receive transfers and receive donations for the right to use excessive rice cultivation land (no more than 03 hectares for provinces and centrally subordinate cities in the Southeast region and the Mekong Delta region; not more than 02 hectares for provinces and municipalities belonging to another central center), an economic organization must be established and have a plan for the use of rice cultivation land and approved by the district People's Committee, except in cases where the recipient considers himself to be a member of the goods inheritance.

The above regulation is in line with the current trend of development of high-tech agriculture and large-scale agriculture. Facilitate the development of agriculture in a new context, enhance the economic value of rice cultivation, develop the country's general agriculture; help some subjects who do not directly produce agriculture such as: civil servants, officials, capital workers, who have scientific and technical investments in developing rice cultivation to improve productivity.

12. CREATING A LEGAL CORRIDOR FOR MARINE ENCROACHMENT

Article 190 of the Land Law 2024 stipulates that the State encourages organizations and individuals to use capital, techniques, and technologies to carry out marine encroachment activities; there is a policy of incentives and support for investors to carry out marine activities. The law prescribes the principles and ways of determining the encroaching area.

The law also provides for the transfer of a project that has a marine content that is approved by the competent authority for the investment policy, when the investor is assigned the marine area for the implementation of the encroachment together with the assignment and lease of land for the implementation of the investment project (Clause 6, Article 190).

Projects with marine activities that have been decided by the National Assembly and the Prime Minister to approve the investment project before the date of entry into force of this Law, the investors may assign land, lease the land without auction of land use rights, and do not tender land use projects to continue to be carried out in accordance with the approved investment project. This is an important legal basis for projects with marine encroachment activities to be implemented when the Law comes into force, removing previous difficulties, when the Land Law 2013 did not provide for marine encroachment activities. /.

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Details of some of the new points of the 2024 Land Law that compare with the 2013 Law on several topics: