On July 1, 2024, a new law revising Vietnam’s regulation of land and real estate entered into effect. (Land Law, No. 31/2024/QH15 (Jan. 18, 2024) (Land Law 2024).) On the same day, Decree 71/2024/ND-CP on Land Prices (June 27, 2024) (Decree 71) also entered in force.
Background
The Land Law 2024 replaces a Land Law enacted in 2013 (No. 45/2013/QH13). Under the 2013 Land Law, the government would prescribe principles and methods for land valuation and promulgate land price frameworks, tables, and specific land prices. (2013 Land Law, art. 18.) The government also would issue land price brackets setting minimum and maximum prices for each type of land in each region. These brackets would be revised every five years or when there was a variance of 20% or more above or below market prices. (Art. 113.) The 2013 Land Law often resulted in land prices at variance from market value.
Main Features of Land Law 2024
Vietnam’s Constitution states that “[t]he land, water resources, mineral resources, resources in the sea and airspace, other natural resources and property invested in or managed by the State are public properties, coming under ownership of the entire people [and is] represented and uniformly managed by the State.” (Art. 53.) The Land Law 2024 reiterates that the land is owned by the entire people, and adds that the “State grants land use rights to land users according to the provisions of this Law.” (Land Law 2024, art. 12.)
The Land Law 2024 provides for the State to prescribe the principles and methods of land valuation, issue land price tables, and decide on specific land prices. (Art. 13, para. 10.) In determining land prices, the government must comply with market principles, follow the due process, and ensure transparency, independence, and the harmonization of the interests of the State, land users, and investors. (Art. 158, para. 1.) Land prices must be based on the purpose and term of the land use, land valuation methods, relevant legal provisions, and other factors affecting land prices. (Art. 158, para 2.). Sources of information that may be used to determine market prices include the national land price database, contracts transferring land use rights, winning prices in land use right auctions, and information on revenue, expenses, and income from land use. (Art. 158, para. 3.) The law also identifies land valuation methods that may be used: the comparison, income-based, surplus-based, and adjustment coefficient methods. (Art. 158, para. 5.)
The Land Law 2024 provides that provincial people’s committees (local government entities) will prepare land price lists to be used for certain administrative purposes. The people’s committees may be assisted in this task by the provincial land management agencies and external consultants. (Art. 159.) The first land price list will be announced on January 1, 2026, and will be updated annually. (Art. 159, para. 3.)
Decree 71
Decree 71 details the procedures to implement the four land valuation methods identified in articles 158 of the Land Law 2024, among other matters. (Decree 71, art. 1.) For example, when the comparison method is used, relevant parties must collect current information on the land parcel being assessed and on other comparable parcels. (Art. 4, para. 1, 2.) In selecting comparable parcels, priority shall be given to the most recent information, and if there are discrepancies among the multiple sources of current information, priority shall be given to the sources in the following order: the national land price database, national price databases, data from the Land Registration Office, data from land auction organizations, data from real estate auctions, real estate enterprises, and survey information. (Art. 4, para. 3a.) Certain similarities in factors affecting land prices and distance to the land plot may also be considered. (Art. 4, para. 3b, 3c.)
Decree 71 specifies factors affecting both non-agricultural and agricultural land prices. Non-agricultural land prices are subject to the fluctuation of location, traffic conditions, availability of water and electricity, planning criteria, current surroundings and safety, land use duration, and other factors associated with practical conditions, culture, and customs at the local level. Meanwhile, agricultural land prices depend on crop and livestock productivity, distance and traffic conditions to the place of production, and consumption of products, among other factors. (Decree 71, art. 8, para. 1, 2.)
Prepared by Nguyet Le, Foreign Law Intern, under the supervision of Sayuri Umeda, Foreign Law Specialist
Law Library of Congress, September 27, 2024
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