A resolution passed by the National Assembly allows for a pilot program to be implemented for four types of projects: real estate business organizations that are granted land use rights; real estate businesses that already have land use rights; real estate businesses that have land use rights and are granted additional land use rights; and real estate businesses established by organizations currently using the land to develop commercial housing projects on the area of production and business facilities that need to be relocated.
Currently, investors are only allowed to develop commercial housing projects if they have land use rights for residential land, according to the 2014 Housing Law. However, from April 1, 2025, investors will be able to agree to obtain land use rights for non-residential agricultural land, non-agricultural land (commercial service land), and other land in the same plot to develop commercial housing projects, as per this resolution.
The agreement to obtain land use rights for the pilot projects shall be made in accordance with the law. In cases where the area of the zone or plot of land where the pilot project is implemented includes land managed by state agencies or organizations but cannot be separated into an independent project, this part shall be included in the total land area for project establishment, and the State shall retrieve and allocate this land to investors without auctions or bidding.
National Assembly delegates vote to pass the draft resolution. Photo: N.Y.
The resolution also stipulates that the selection of pilot projects must meet certain criteria, including being located in urban areas or areas planned for urban development.
The total area of residential land in the pilot projects should not exceed 30% of the increased residential land area in the planning period (compared to the current land use status) according to the land allocation and zoning plan in the provincial planning for the period of 2021-2030 that has been approved.
Regarding procedures, the resolution stipulates that the People’s Committees of the provinces shall submit to the Provincial People’s Councils for approval the list of land plots expected to implement the pilot projects, along with the list of works and projects that require land retrieval as prescribed in Clause 5, Article 72 of the Land Law.
Nationwide pilot to ensure consistency
In the explanatory report before the resolution was passed, Mr. Vu Hong Thanh, Chairman of the Economic Committee, said that there were opinions suggesting that the scope of the pilot program should be carefully considered and only implemented in some localities with a high demand for commercial housing.
Regarding this issue, the National Assembly Standing Committee stated that currently, small-scale commercial housing projects often encounter difficulties. Therefore, if the pilot program is only implemented in some localities, other localities that want to implement commercial housing projects under the agreement mechanism will not be able to do so.
“Therefore, implementing the pilot program nationwide will ensure consistency, uniformity, and fairness among localities,” Mr. Thanh emphasized.
This resolution will take effect from April 1, 2025, and will be implemented for five years.
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