Vietnam Land Law 2024 (effective August 1, 2024) brings important changes on land valuation, land use rights, recovery, and compensation affecting businesses.
After years of discussion, Vietnam Land Law 2024 was passed by National Assembly with many new points compared to 2013 Law. Real estate businesses and those needing land use, especially FDI enterprises, must understand these changes.
1. Land Valuation Based on Market Principles
This is the most fundamental change:
1.1. Land Price Schedule
Before: every 5 years, issued by provincial People's Committee.
After: updated annually, based on market prices through scientific valuation methods.
1.2. Valuation Methods
Four methods applied simultaneously:
- Direct comparison method
- Income method
- Surplus method
- Adjustment factor method
1.3. Impact
- Land prices close to actual market → higher taxes and fees
- Fairer compensation when land recovered
- More accurate land auctions, fewer discrepancies
2. Land Use Rights
2.1. Land Use Duration
Businesses receive land allocation, leases up to 50 years (70 years for large-scale or difficult area projects). After expiry can be extended multiple times.
2.2. Expanded Rights for FDI Enterprises
FDI enterprises can:
- Receive land use rights transfer from Vietnamese enterprises
- Lease land from households, individuals (previously only from State)
- Receive capital contribution as land use rights
3. Land Recovery
3.1. Expanded Cases for National, Public Interest Recovery
New law details recovery cases including:
- Infrastructure construction projects
- Socioeconomic development projects
- Defense - security projects
3.2. More Transparent Recovery Process
- 90-day advance recovery notice
- Community meetings, public opinion gathering
- Specific decisions on compensation plans
- Complaint resolution mechanism
4. Compensation and Resettlement Support
4.1. Land Compensation
Principle: compensation in same-purpose land; if not available, in money per market price.
4.2. Assets on Land Compensation
Full compensation for new construction value, no depreciation.
4.3. Additional Support
- Living stability support
- Job training, career change support
- Resettlement support
- Bonus for timely site clearance
5. Real Estate Projects
5.1. Real Estate Business Conditions
Real estate businesses must:
- Have legal capital: VND 20 billion
- Make deposit with state agency
- Have professional staff
5.2. Sale of Off-Plan Housing
Sale conditions:
- Have construction permit
- Built to basic infrastructure
- Bank guarantee
- Standard contract approved by state agency
6. Land Use Rights Auction
Stricter auction process:
- 30-day advance public notice
- Clear participation conditions
- Starting price close to market
- Deposit and bid withdrawal penalty mechanism
- Public results disclosure
7. Impact on Businesses
7.1. Businesses Currently Using Land
- Land tax, fees increase due to market-based prices
- Need to reassess real estate book value
- Opportunity to increase business value if much land owned
7.2. Real Estate Businesses
- Higher legal capital and deposits → barrier for small businesses
- More competitive auctions
- Future sales must meet many conditions
7.3. FDI Enterprises
- Expanded access to land
- Can receive transfers from Vietnamese enterprises
- Still some restrictions on land type and purpose
8. Recommended Actions
- Review all land-related contracts: leases, purchases, transfers
- Revalue real estate: update book value and insurance
- Prepare for higher financial obligations: taxes, fees
- Real estate businesses must meet new conditions: increase capital, train staff
- Consult specialized lawyers: land law complex with frequent changes
This article is for reference only. Please contact a lawyer for accurate advice.
Frequently Asked Questions
Are old red books still valid after Land Law 2024?
Yes, old red books remain valid. However when transactions occur (transfer, mortgage), may be required to update information per new regulations.
Can FDI enterprises buy land in Vietnam?
Still cannot directly buy like Vietnamese individuals. FDI enterprises mainly lease from State or receive land use rights transfers from Vietnamese enterprises for registered purposes.
When land is recovered, how to ensure fair compensation?
Actively participate in community meetings; request independent valuation; can complain compensation decisions; finally can sue administrative court.
Is real estate investment currently risky?
Some risks due to law changes, economic fluctuations. However long-term Vietnamese land continues to appreciate. Need thorough legal due diligence before investing.
My business builds project per 2013 Law — must redo per 2024 Law?
Most approved projects continue under old regulations (grandfathering clause). However new procedures (sales, transfers) must follow 2024 Law.