Based on the “Summary of Recommendations for Amending the 2024 Land Law” presented by the Vietnam Real Estate Association (VNREA), a series of notable proposals have been put forward to dismantle major, long-standing barriers in project investment and development. These changes, if approved, are expected to mark a turning point for the real estate market and attract significantly more domestic and foreign investment.
1. Breakthroughs in Land Access and Site Clearance
The Current Deadlock Caused by “Minority Obstruction”
One of the greatest challenges for investors today is site clearance. For projects not subject to state-led land acquisition, investors must secure 100% agreement from all residents. However, just a few uncooperative households or those demanding unrealistic compensation are enough to stall an entire project, regardless of whether the majority of the land area has been agreed upon.
Proposal for a “Hybrid” Mechanism
The Association proposes a more flexible model: if an investor achieves a minimum agreement rate (e.g., 70%), the state will assist in acquiring the remaining land area according to regulations. This is a groundbreaking solution that protects the interests of the majority of residents and investors while preventing “strategic holdouts” used for leverage.
Expanding the Scope of Land Acquisition for Tourism and Logistics Projects
Furthermore, the recommendation proposes expanding the scope of state-led land acquisition to include projects that promote socio-economic development, such as:
- Tourism and entertainment projects of 100 hectares or more, or with an investment capital exceeding VND 20,000 billion.
- Logistics centers and warehousing projects of 20 hectares or more.
This will facilitate strategic investors’ access to cleared land in key sectors.
2. Opening the Door for Foreign Capital
The current law (Article 28) does not permit foreign investors to receive transfers of capital contributions derived from the value of land use rights—a bottleneck that has slowed the wave of real estate M&A.
The proposed amendment suggests allowing foreign investors to acquire shares and capital contributions in Vietnamese enterprises whose assets include land funds derived from land use rights. This is considered a strategic change that would both increase market liquidity and open up an effective channel for capital mobilization for domestic businesses.
3. Enhancing Financial Transparency and Investment Cost Recognition
Regarding the Deduction of Site Clearance Costs
Currently, although investors advance funds for site clearance, they can only deduct a portion of these costs, often facing complex procedures. The new proposal allows the remaining costs to be deducted from other financial obligations, which would significantly improve cash flow for businesses.
Regarding the Calculation of Project Development Costs
Many actual costs are not currently recognized (e.g., marketing, sales discounts, consulting, amenities). This proposal recommends including a full range of reasonable costs to help determine land prices that accurately reflect market reality, thereby providing a precise picture of a project’s financial performance.
4. Reforming Procedures and Shortening Implementation Times
A major administrative hurdle is the requirement to obtain a certificate of “no land law violations” from all 63 provinces and cities to be eligible for land allocation. This process is costly and prolongs the investment preparation period.
The new proposal suggests a mechanism of self-declaration and self-responsibility, with post-audits conducted through the National Land Information System—moving towards a streamlined, transparent, and expedited process.
Removing the 1/500 Detailed Plan Requirement for Non-Residential Projects
For projects without housing (e.g., industrial, commercial), the proposal clarifies that creating a 1/500 detailed plan should not be mandatory, thereby saving unnecessary time and expense.
Conclusion: Ready for a New Investment Cycle
These proposed amendments to the 2024 Land Law demonstrate a clear effort to address systemic bottlenecks by:
- Resolving deadlocks in site clearance.
- Paving the way for foreign capital.
- Streamlining financial obligations.
- Simplifying administrative procedures.
If passed, these changes will not only stimulate the real estate market but also make a significant contribution to enhancing national competitiveness and drastically improving the investment environment in Vietnam.