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Land Law 2024

On January 18, 2024, the 15th Vietnamese National Assembly passed the Land Law 2024, effective from January 1, 2025, replacing the current Land Law 2013. However, it will take early effect for Article 190 and Article 248 of this Law from April 1, 2024. In the article below, Viet An Law will introduce important new points of the Land Law 2024, replacing the Land Law 2013.

Legal basis

  • Land Law 2013;
  • Land Law 2024 (effective from January 1, 2025).

Some featured new points of the Land Law 2024

Compared to the Land Law 2013, the Land Law 2024 stipulates 05 new groups of issues on the rights and obligations of enterprises with land, with stricter regulations on land use rights transfer, land prices, and land lease and land allocation.

Enterprises have the right to switch to paying annual land rent

Previously, the Land Law 2013 only stipulated that businesses and individuals could switch from annual land rent payments to one-time payments for the entire lease period. However, in Clause 2, Article 3 of the Land Law 2024 on the right to choose the form of land rental payment, businesses that are leased land by the State with a one-time payment can transfer the annual payment to reduce financial pressure, leading to reduced real estate prices.

Therefore, economic organizations, individuals, people of Vietnamese origin residing abroad, and economic organizations with foreign capital are leased land by the State with a one-time payment for the entire lease period and can choose to transfer land paid annually. Previously paid land rent will be deducted from land rent according to Government regulations.

Expanding the limit for transfer of agricultural land use rights of individuals

Accordingly, the new Land Law allows the expansion of “the limit on transfer of agricultural land use rights to individuals to a maximum of 15 times the limit on individual agricultural land allocation for each type of land” in Clause 1, Article 177, creating conditions to use agricultural land more effectively so that the agricultural sector is increasingly developing, farmers are increasingly wealthy, and the face of rural areas is increasingly innovative, which will have a positive impact on both the economy and the real estate market.

Specifically, Clause 1, Article 177 stipulates that the limit for transferring agricultural land use rights to individuals must not exceed 15 times the limit for transferring agricultural land to individuals for each type of land specified in Clauses 1, 2, and 3 of Article 176 of the Land Law 2024.

Previously, the Land Law 2013 stipulated that the limit for transferring agricultural land use rights to households and individuals was no more than 10 times the limit for transferring agricultural land to households and individuals for each type of land specified. in Clauses 1, 2, 3, and Article 129 of the Land Law 2013.

Strictly conditions for transferring land use rights in the real estate business

In addition to general regulations on conditions for transferring land use rights such as the Land Law 2013, Article 45 of the new Law also stipulates cases where investors transfer land use rights that already have technical infrastructure. Real estate projects must meet other conditions as prescribed by the Law on Real Estate Business and the Law on Housing.

In addition, Land Law 2024 also adds regulations related to economic organizations that are entitled to benefits and profit from the transfer of agricultural land use rights. Accordingly, this organization must have an agricultural land use plan approved by the Provincial People’s Committee Browser. Contents that must be shown in the plan include:

  • Location, area, land use purpose;
  • Agricultural production and business plan;
  • Investment capital;
  • Term of land use;
  • Land use progress, regulations related to land allocation and land lease

Enterprises that violate land can still be allocated or leased land

According to Clause 3, Article 58 of the Land Law 2013, people who are allocated land, leased land by the State, or are allowed to change the land use purpose to implement investment projects must meet the conditions of not violating the law.

However, according to point c, clause 2, Article 122 of the Land Law 2024, violating the provisions of the Land Law but having fully complied with the legally effective decisions or judgments of the competent authority at the time of the company invests in projects requesting land allocation, land lease, and permission to change land use purposes. This demonstrates the government’s open policy, creating conditions for businesses to have the opportunity to start over after previous violations.

The new Land Law has opened up opportunities for these enterprises by clearly stating that this enterprise has violated the provisions of land law but has thoroughly corrected the violation before the time of applying for land allocation, and land lease. For this purpose, businesses will still receive land and lease land, and the state will allow businesses to change the land use purpose to carry out investment projects.

Pay back the land rent that is exempted or reduced upon transfer of land use rights

According to the provisions of Point b, Clause 3, Article 33 of the Land Law 2024, domestic organizations are allocated land by the state with collection of land use fees and lease land with one-time land rental payment for the entire lease period to implement the investment project with business purposes which are exempted or reduced from land use fees or land rents have the same rights and obligations as those who are not exempted or reduced. In case of transferring or contributing capital with land use rights, an amount of money must be paid to the State corresponding to the amount of land tax or land rent exempted or reduced at the time of transfer, land lease, or permission to change land use purposes, unless otherwise prescribed by relevant laws.

This is a completely new regulation to avoid and limit negative effects arising from enjoying State incentives.

To sell assets on land and sell land lease rights to other businesses

According to Clause 2, Article 46 of the Land Law 2024, economic organizations that are leased land by the state are allowed to sell assets attached to land and rental rights in lease contracts when the following conditions are met:

The conditions specified in Clause 1, Article 46 include:

  • Assets attached to leased land are legally created and registered according to regulations.
  • Construction has been completed under the detailed construction planning and the investment project has been approved and approved (if any), except in cases where it must be carried out according to an effective Court judgment or decision, enforcement decisions of judgment enforcement agencies or conclusions of competent state agencies.
  • Compensation, support, and resettlement money have been advanced but have not been fully deducted from the land rent payable.

Regulations on land recovery

Regulations on land recovery when financial obligations are not fulfilled

Previously, land recovery in cases where land users did not fulfill their obligations to the State specified at Point g, Clause 1, Article 64 of the Land Law was carried out in cases where the land users did not or incompletely perform paying land use rights and land rent according to the provisions of law but being forced by a competent state agency to fulfill financial obligations without doing so.

The new Land Law directly stipulates in Clause 6, Article 81 that land users who do not fulfill their financial obligations to the state are subject to land recovery.

Regulating cases where the State “recovers land for socio-economic development for national and public benefits”

Article 79 of the Land Law (amended) 2024 specifically stipulates 31 cases in which the State “recovers land for socio-economic development for national and public benefits” and in Clause 32, Article 79 also stipulates “In case of land recovery to implement projects or works for the national or public interest that do not fall into the cases specified in Clauses 1 to 31 of this Article, the National Assembly shall amend and supplement the cases of land recovery of this Article” ensures openness, transparency, ease of monitoring and overcomes the situation of some local cases of widespread land recovery as happened before.

Replace the regulation on “land price frame” with “land price list” according to market mechanism

The land price frame specified in the Land Law 2013 is the price prescribed by the Government, issued periodically every 5 years.

Accordingly, the “land price list” is developed annually and the “first land price list” is announced and applied from January 1, 2026, and adjusted from January 1 of the following year, which will help the “land price list” approach the market land price. According to the provisions of Clause 1, Article 159 of the Law 2024, the land price list applies to the following cases:

  • Calculate land use fees when the State recognizes residential land use rights of households and individuals; change the land use purpose of households and individuals; Leasing land with annual land rent, except for cases of leasing land through auction of land use rights;
  • Calculate land use tax; Income tax from land use rights transfer for households and individuals;
  • Calculate fees in land management and use; fines for administrative violations, compensation to the State in the field of land;
  • As a basis for calculating land use fees and land rents when recognizing land use rights with land use fees collected, leased land with one-time land rent payment for the entire rental period for households and individuals;
  • Calculate the starting price for auctioning land use rights when the State allocates or leases land in cases where the land plot or land area has been invested in technical infrastructure according to detailed construction planning;
  • Calculate land use fees in cases of land allocation not through auction of land use rights to households and individuals selling state-owned houses to current tenants.
  • Building accommodation for industrial park workers is exempted or reduced in land rent.

Failure to fulfill financial obligations regarding land will result in land confiscation

According to Clause 6, Article 81 of the new Land Law, land users who do not fulfill their financial obligations regarding the land will have their land revoked. Specifically, land users do not fulfill financial obligations in the following cases:

  • Failure to pay land use fees or land rent beyond 90 days from the date of notice of payment of land use fees or land rent when the State allocates or leases land;
  • Late payment of land use fees or land rent beyond 12 months from the date of the decision to enforce the administrative decision on tax management.

Therefore, businesses must pay land use fees and land rent on time if they do not want their land to be revoked.

Land law consulting services of Viet An Law

  • Consulting on procedures for applying for a Land Use Rights Certificate;
  • Consulting on procedures for transferring names of land use rights certificates;
  • Consulting on land law on procedures for donating houses;
  • Consulting on notarization procedures for home purchase and sale contracts;
  • Consulting on procedures for applying for and leasing land for businesses;
  • Consulting on changing land use purposes from agricultural land, specialized land to residential land;
  • Consulting on contract drafting procedures and legal advice during the red book process;
  • Consulting on land law and regulations related to drafting documents, transactions and contracts related to land use rights.
  • Drafting documents on real estate transfer, real estate conversion, real estate donation, real estate inheritance, real estate mortgage, real estate leasing, capital contribution by the value of land use rights;
  • Consulting and authorized representation for customers to participate in the process of negotiating and signing contracts.
  • Representing to resolve disputes related to land and real estate at courts and administrative agencies;
  • Consulting on complaints and resolving land disputes related to land law on recovery and compensation during site clearance for investment projects;
  • Consulting and performing legal services on housing and land use rights such as clearing tax debt, transferring names, issuing Land Use Rights Certificates;
  • Consulting on the rights and obligations of the parties in land disputes, drafting lawsuit petitions, and guiding lawsuit procedures.

If you need advice on the land law in Vietnam, please contact Viet An Law Firm for the best support.

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