After more than 8 years of implementation of the Vietnam Land Law 2013 (45/2013/QH13), important results have been achieved on land management, with a comprehensive, stable, and practical legal corridor for the exploitation and use of land which laid the foundation of the Vietnamese real estate market and making positive contributions for socio-economic development of this emerging country.
According to data from Batdongsan.com.vn, over the past 10 years, Vietnam’s real estate increased sharply by 50-300% in the 2014-2019 period and the average housing price in places where the increase has been the lowest is also 3 times higher than in 2011, reaching the current average house price of about USD 2,000/m2 in Hanoi and USD 2,500/m2 in Ho Chi Minh City.
Furthermore, as per the Law on Housing 2014, foreign organizations (including foreign-invested enterprises, representative offices, investment funds and bank branches) registered in Vietnam and individuals regularly present in the country are allowed to purchase, rent, receive as a gift, or inherit houses in Vietnam, which makes it a very interesting destination for doing business, with the real estate sector reaching a total FDI capital of over 3.15 billion USD recorded by Ministry of Construction at the end of June 2022.
Despite the valuable inputs from the Land Law, with the passing of years and after its repeated application, some inefficiencies have surfaced, such as the “land price bracket system”, according to which the Government should adjust the minimum and maximum prices for the land in each specific region every 5 years, but which is not actually based on the real situation of the market and has been one of the factors leading to the current skyrocketing price of land.
In order to continue the process of the improvement of state policies, increasing the efficiency of land management and creating a driving force to turn Vietnam into a high-income developed country, the Central Committee promulgated the Resolution 18-NQ/TW, in which it requested that amendments to the 2013 Land Law and a number of related laws must be completed by year 2023, to ensure uniformity and consistency in the legal framework, and it should be fully implemented throughout the country by 2030.
Among the objectives raised in this occasion we can include:
- Ensuring publicity and transparency of the land by publicizing land prices and performing real estate transactions on regulated trading platforms requiring to use bank transfers or cashless payments.
- Removing the land price bracket and developing a method to determine the land price according to the market principle.
- Improving and strengthening inspection and supervision on land-related disputes or complaints.
- Intensifying prevention and control of corruption and acts of misconduct.
Another important key move adopted recently is the Resolution 111/NQ-CP, issued at the seminar meeting on law-making on August 2022, in which the future projects of Land Law revision are explained, such as:
- Promoting decentralization and increased autonomy in local governments to take into account the specific situation of each locality.
- Expanding the limit on the transfer of agricultural land use rights of households and individuals.
- Establishing a support fund for people whose land is recovered and whose working capacity is restricted.
- Synchronizing the Land Law with the provisions of the law on investment, housing, and relevant laws regarding the access to land of foreign-invested economic organizations.
In light of the above, it is extremely crucial for the Vietnam government to implement fair, transparent and clear policies to regulate the use and management of the land flexibly and efficiently, for the sake of a stable and attractive real estate market which is nowadays conditioning the decision of a big portion of foreign stakeholders to choose Vietnam as their next destination for establishing a company or making other kinds of investments such as the purchasing of property in this magnificent and ever-growing country with a multitude of opportunities and incentives.