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PROPERTY

for the collection of land use fees are permitted The recently-passed Land Law will usher in an era of
to use the land use rights (LUR) and assets change, boost developer confidence, and accelerate
attached to the land as loan collateral at infrastructure spending. The fact that the government has
permitted credit institutions in Vietnam. acknowledged price lists and market value is a major step in
Pursuant to the new Land Law 2024, land value reform and development in Vietnam. I think that
in addition to the right to use the LUR moving towards this market value framework has tremendous
and assets attached to the land as collateral
at permitted credit institutions, domestic application and tremendous benefits for Vietnam’s
organizations are also permitted to use development. Vietnam has got one of the most rapidly-
this collateral with other economic organ- evolving legal systems in the world. But my view is it needs to be more at the
izations or individuals. However, FIEs are administration level of implementation. The private sector is responsible for
still only permitted to use the LUR and the development of the residential market. But it is quite di!cult for the private
assets attached to the land as collateral at sector to respond without any surety around approval processes.”
credit institutions licensed to operate in
Vietnam, which remains unchanged from
the Land Law 2013. Mr. Troy Gri!ths
Country Manager, Savills Vietnam
EFFORT REQUIRED
The amended Land Law will not take
effect until January 2025. “This means that According to the assessment of businesses, in addition to
some legal problems will persist, including its progressive points, there are still some new tightening
credit policies, bank loan interest rates, laws. For example, with real estate formed in the future,
and bonds,” said Mr. Binh. regulations are tightened. This not only limits capital
According to the MB Securities Com- mobilization by businesses, but also limits the investment ability
pany (MBS), adjusting land price lists will of secondary investors. In my opinion, the new Law has been
increase land use costs for enterprises, passed but there are still 65 new articles left for the government
affecting investors’ gross margins. However, to stipulate in detail. These 65 articles include many sensitive issues related to
it also notes that the extent of the increase
will depend on the implementing decrees past problems facing businesses. Businesses therefore still look forward to
that accompany the law, which will specify circulars and decrees being issued in the near future.”
adjustment coefficients for different regions
and the degree of land price adjustment Mr. Bui Van Doanh
at the local level. Director, Vietnam Real Estate Research Institute
Some uncertainties remain with the
new regulations in the new Land Law.
The Vietnam Association of Realtors
(VARS) suggests that determining land account factors protecting and developing contributing opinions and discussions related
prices based on market prices may require domestic enterprises, not just strength- to the Land Law. When the business com-
the State to allocate sufficient budget ening FIEOs. munity participates “substantially, deeply
resources to ensure effective site clearance From a business perspective, Mr. Dau and proactively”, any overlap in regulations
and compensation. This raises concerns Anh Tuan, Deputy Secretary-General and and procedures will be reduced.
that when land prices closely align with Director of the Legal Department at the However, problems arising in practice
market prices, it may increase business Vietnam Chamber of Commerce and Indus- are unavoidable, as was clearly seen in the
land use costs, leading to further increases try (VCCI), said the Land Law has tried to implementation of the Land Law 2013.
in real estate prices. codify the most important regulations but Mr. Tuan therefore said that, during imple-
Mr. Truong Anh Tuan, lawyer and Deputy simply cannot cover everything. mentation, if businesses and partners iden-
Secretary General and Head of the Legal In order for the law to come into practice tify problems, they need to promptly contact
Department at the Vietnam Real Estate shortly, he believes it is necessary to quickly the appropriate unit. %
Association (VNREA), said the newly- issue decrees
approved Law is a great success, but to meet and guiding cir-
the expectations of the business community culars, perhaps
there are still concerns. He believes that the even this year. In
biggest contradictions and conflicts in the particular, the
Law relate to consumer interest groups and oversight role of
economic development interest groups. the NA is impor-
“The biggest conflict is in the residential tant to ensure
real estate market, while other types of better legal
real estate, such as industrial real estate, enforcement.
have conflicts but not as great,” he added. He also
“In fact, complaints and lawsuits mainly noted that busi-
focus on types of residential real estate.” nesses and busi-
Businesses represent economic devel- ness associa-
opment interest groups changing the tions increas-
socio-economic and urban face of localities, ingly play an
he went on. Therefore, the decentralization active role when
of power to localities needs to take into participating in

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