Proposal to amend the Land Law: Unstable land price in Vietnam

Proposal to amend the Land Law: Unstable land price in Vietnam

According to businesses, the current 2013 Land Law reveals many overlapping and inconsistent contents with the laws that make it difficult for them to develop real estate projects.

The Government Office has just announced the conclusion of Prime Minister Pham Minh Chinh at a recent conference on the performance of assigned tasks of the Ministry of Natural Resources and Environment, in which, the Prime Minister urgently requested to revise the current Land Law and started the drafting of an amended Land Law.

This is the information that the real estate business community has been looking forward to for many years. Businesses are really excited because, after nearly 10 years of implementation, the 2013 Land Law has created many problems. Not to mention, many regulations have not kept up with the development of the market.

Statistics from the Ho Chi Minh City Real Estate Association show that currently, the country has about 82,900 condo hotels (condotels), most of which are located in skyscrapers belonging to resorts, using land funds as “commercial and service land”.

Some provinces have issued “Certificates of residential land use rights without the forming of residential units” for these condotels. However, the central authority concluded that the issuance of this certificate was contrary to the provisions of the Land Law. This is one of the reasons why the condotel market has slowed down for the past 2 years.

A need to revise the current Land Law

Last March, the Government issued Decree 30 guiding the implementation of several articles of the Law on Housing. Immediately, some businesses and associations responded by saying that many regulations were still inadequate. The main reason for this issue was coming from the Land Law.

“In Decree 30, it is clearly stated that he must have residential land, including 10 m2, or 100 m2. For projects without residential land, it is impossible to propose investment. 100% of housing development projects use residential land. Agricultural land use will be at an impasse. The enterprise’s recommendation to this Land Law is to support the implementation of housing development projects on the basis that investors legally own the land and propose suitable projects following the approved plan,” Mr. Lai Tuan Ngoc, real estate manager of Xuan Mai Investment and Construction Joint Stock Company suggested.

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Proposal to amend the Land Law: Unstable land price in Vietnam

Enterprises believe that the current Land Law has revealed many overlapping and inconsistent contents with other laws (for example, Law on Housing, Law on Real Estate Business, Law on Construction…) and other documents and relevant manuals. It is the “bottleneck” of the law that has made it difficult for businesses to develop new real estate projects, reducing the supply of housing in the market, pushing up selling prices.

The ongoing Land Law from 2013 not only affecting businesses but also hinders the implementation of the attraction of investment and project development of localities.

Land price is lower than market price

Regarding land prices, according to the Ministry of Natural Resources and Environment, the 2013 Land Law stipulates that the determination of specific land prices is carried out according to a strict process (investigation, survey to determine land price, get a pass from the Appraisal Council, and finally, land price announcement).

However, the Ministry of Natural Resources and Environmental acknowledged that the specific land price in some localities is lower than the market price.

To overcome this situation, while waiting for the 2013 Land Law to be fully revised, the Government has directed the Ministry of Natural Resources and Environment to synthesize feedback from localities to amend Decree No. 44/2014 of the Government regarding the regulations on land prices, Circular No. 36/2014/TT-BTNMT to promptly guide and remove problems of localities on land valuation, especially for land acquisition projects transitioning between the 2003 Land Law and the 2013 Land Law.

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