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Commercial and service land is a popular type of land, but not everyone understands what it is, how long is the land use term, and whether or not it may be used to build houses.
What is commercial and service land?
Commercial and service land is a type of land belonging to the group of non-agricultural production and business land, besides other types of land such as land in industrial zones, land in industrial clusters, land in export processing zones, and land in non-agricultural production, land used for mineral activities, land for the production of building materials, and for making pottery.
The name of commercial and service land clearly shows the land use purpose that the land user is obliged to comply with.
Appendix 01 issued together with Circular 27/2018/TT-BTNMT stipulates the concept of commercial and service land as follows:
“Commercial and service land is land used for construction of business, service and commercial establishments and other works in service of business, services and commerce (including headquarters; representative offices of economic organizations; land for warehouses and yards for goods of economic organizations not in production areas; beaches).
In short, commercial and service land is a type of land belonging to the group of production and business land with the purpose of being used to build business, service, commercial establishments, and other constructions for business, service, and commerce.
Term of commercial and service land use
Unlike many other types of land, the term of commercial or service land can be stable for long-term use or limited-term use, specifically:
Clause 4, Article 35 of the 2013 Land Law stipulates that commercial, service, and non-agricultural production facilities of households and individuals are being used stably which is not land allocated or leased by the State with a definite term, it has a stable and long term use.
If this is the case, the land use term stated in the land use right certificate is “Long-term”.
For land allocated by the State to organizations, households, or individuals or leased for commercial or service purposes, the term of use shall be considered and decided on the basis of investment projects or applications for land allocation or land lease but not exceeding 50 years.
For projects with large investment capital but slow capital recovery, investment projects in areas with difficult socio-economic conditions, and areas with extremely difficult socio-economic conditions that require a long period of time. For a longer-term, the land allocation or land lease term shall not exceed 70 years.
At the expiration of the time limit, if the land user wishes to continue using it, the State shall consider extending the land use term but not exceeding the time limit for land allocation or land lease for the first time.
Can commercial and service land be used for housing construction?
Based on the concept of housing specified in Clause 1, Article 3 of the Law on Housing 2014, the purpose of commercial and service land use is according to Clause 1, Article 153 of the 2013 Land Law and Appendix 01 attached to Circular 27/ 2018/TT-BTNMT, it can be seen that commercial and service land cannot be used for housing construction.
This is quite understandable because:
- Housing is a work built for the purpose of living and serving the daily-life needs of households and individuals.
- Commercial and service land is the land with the purpose of building business, service and commercial establishments, and other works in service of business, services, and commerce.
Therefore, it is forbidden to build houses on commercial and service land, instead, houses must be built on residential land.
Regulations on commercial and service land
Article 153 of the 2013 Land Law provides for commercial and service land as follows:
The use of commercial and service land must be consistent with master plans, plans on land use, urban construction planning, construction planning in rural residential areas already approved by competent state agencies, and regulations on environmental protection.
Economic organizations, households, and individuals that use commercial or service land through the form of the land lease by the State; receive land use right transfer, land lease, land sublease, receive capital contribution with land use rights from economic organizations, households, and other individuals, overseas Vietnamese; sublease land associated with the infrastructure of foreign-invested enterprises.
Overseas Vietnamese use commercial and service land through the form of the land lease by the State; lease or sublease land from other economic organizations, households, individuals, and overseas Vietnamese; sublease land associated with the infrastructure of foreign-invested enterprises.
Overseas Vietnamese who have the right to own houses in accordance with the law on housing may also inherit, given land use rights as the ground for the construction of non-agricultural production, trade, and service establishments.
Foreign-invested enterprises use commercial and service land in the form of the land leased by the State; lease or sub-lease land from economic organizations or overseas Vietnamese; sublease land associated with the infrastructure of foreign-invested enterprises.
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