Key takeaways
- Adjustments to land prices and valuation policies
- Refining the land lease regime
- Clarification of land allocation or land lease that is not subject to a Land Use Rights (LUR) auction or bidding for investor selection
- Guidance on land expropriation and private agreements to directly acquire land
- Adapting to the two-tier administration system
In more detail
- Adjustments to land prices and valuation policies
The opening provision in the Land Law 2024's chapter on land pricing provides that land prices shall be determined "based on market principles."1 Therefore, it is no surprise that the most prominent part of the Draft Amendment is the proposed removal of this foundational rule.
Policy-wise, the proposed shift seeks to address concerns regarding distortions in land prices. The white paper accompanying the Draft Amendment indicates that there will be increased state involvement in both determining and supervising land prices.2 It suggests that the market principle has not been totally abandoned but is being restrained under a more state-led framework.
In terms of the law, it is not yet clear what this approach would ultimately lead to. For now, the Draft Amendment adds several variables to determine land prices when compared to the Land Law 2024,3 including the following:
- Land price adjustment coefficient (hệ số điều chỉnh giá đất in Vietnamese).
- Land use fees or land rental collection ratio (tỷ lệ thu tiền in Vietnamese), depending on the land, purpose of the land use and form of the land use.
- Deduction coefficient for infrastructure construction costs (hệ số khấu trừ về chi phí xây dựng in Vietnamese).
Only the first variable has a new definition in the Draft Amendment, and once again the land price adjustment coefficient takes center stage. The land price coefficient is a land price calculation method that has already been introduced in previous land laws. Simply put, the land price adjustment coefficient is the rate of increase or decrease for specified zones and locations, as promulgated by the provincial/city people's committee every year.4
On the other hand, the Draft Amendment still proposes a system where the provincial/city people's committee will issue and update the local land price tables (bảng giá đất in Vietnamese).5 However, there is another proposal to leave it to the government to issue further regulations on local land price tables.
- Refining the land lease regime
A similarly prominent development is the proposal to abolish the current list of cases where the land user is entitled to request a lump-sum land rental payment.6
| Current Land Law 2024 |
Proposed amendment |
| Under the existing regulations, annual land rental payment is the default method. Lump-sum payment is only permitted in limited, specifically prescribed cases. |
The Draft Amendment seemingly goes back to the principle that "the land user is entitled to choose the land lease form between lump-sum land rental payment for the entire term, or annual land rental payment." |
Policy-wise, the white paper accompanying the Draft Amendment pointed out that the Land Law 2024's current policy has created challenges for business accounting, mortgage of land use rights and capital mobilization, particularly in health and education projects (which require annual land rental payments). If the proposed approach in the Draft Amendment becomes official, the investors of these projects will be able to pay the land rental in a lump sum for the entire term of the lease, thereby improving project bankability and long-term financial planning.
- Clarification of land allocation or land lease that is not subject to a Land Use Rights (LUR) auction or bidding for investor selection
The Draft Amendment proposed changes to Article 124.1 of the Land Law 2024 to remove the supplementary condition that refers to other laws determining the minimum number of investors expressing interest in a project that are exempted from the land use fee or land rental.7
Furthermore, the Draft Amendment also proposed changes to Article 124.3 of the Land Law 2024 to remove the reference to cases eligible for land allocation or land leases to be decided by the prime minister. Instead, it provides that the provincial/city people's committee may decide to allocate or lease land without having to go through a land auction or project bidding8 if the project qualifies as one of following:
- Projects for public (utility) purposes (mục đích công cộng in Vietnamese), which includes land for transportation facilities (e.g., ports), land for waste treatment facilities, land for energy facilities and land for telecommunications or IT facilities (e.g., data centers).
- Projects that have already received investment policy approval from the National Assembly or prime minister and that do not fall into the cases where investor selection or project bidding are mandatory according to investment and bidding regulations.
On a related note, the Draft Amendment proposes adding another category of project subject to the land use fee or land rental exemption: use of land to develop cultural, social, health, educational, sport, science and technology, environmental, meteorology, diplomatic, and digital transformation projects.
- Guidance on land expropriation and private agreements to directly acquire land
The Draft Amendment adds new cases where the state is entitled to expropriate land (i.e., subclauses 33 and 34 of Article 79 of the Land Law 2024), including the following:9
- Projects located in "free-trade zones" and "international financial centers".
- Logistics projects.
- Mixed-use developments combining residential, urban, tourism, commercial, cultural or sports functions.
More importantly, where the investor chooses to acquire land by itself through private agreements but is unable to acquire all the necessary land within the allowed time limit, the state will only step in to expropriate the remaining land in either of the following circumstances:
- The investor has already acquired 75% of the land area.
- The investor has reached an agreement with 75% of the land users in the project area.
This provision strikes a balance between respecting private property rights and enabling strategic development. However, once the 75% threshold is met, the remaining landholders may feel pressured or marginalized, potentially giving rise to disputes over the compensated amounts or procedural fairness. To mitigate this risk, transparent valuation processes and accessible grievance mechanisms must be in place.
- Adapting to the two-tier administration system
Following the abolition of district-level administration and the ongoing consolidation of administrative units from 1 July 2025, the Draft Amendment accordingly introduces extensive revisions to numerous provisions that previously referenced the district-level people's committee or district-level authorities. In addition, amendments are necessary to harmonize with new decrees that have already taken effect regarding the division of authorities (e.g., Decree No. 151/2024/ND-CP).
- Before 1 July 2025, land lease, allocation and land use conversion approvals were based on district-level land use zoning plans (quy hoạch sử dụng đất cấp huyện in Vietnamese) and annual land use plans (kế hoạch sử dụng đất cấp huyện in Vietnamese).10
- At present, the Draft Amendment is proposing an official basis to shift these approvals to commune-level (ward-equivalent) land use plans and zoning.11
Notably, the Draft Amendment also proposes a second legislative approach that suggests abolishing the commune-level land use zoning and land use plans altogether.12 This second approach may raise important questions about the future framework for land use decision-making at the local level. We believe that this second approach is intended to invite further feedback from a public administration perspective, particularly regarding the practicality, oversight and implications of removing this planning tier.
1 Article 1.38 of the Draft Amendment and Article 158.1 of the Land Law 2024.
2 "[The State] shall formulate mechanisms and methods to calculate land prices according to market principles, but with State supervision … the State shall determine the land prices on the primary markets."
3 Article 1.40 of the Draft Amendment and Article 155 of the Land Law 2024.
4 Article 1.42, of the Draft Amendment and Article 160 of the Land Law 2024.
5 Article 1.41 of the Draft Amendment and Article 159 of the Land Law 2024.
6 Article 1.24 of the Draft Amendment and Article 120 of the Land Law 2024.
7 Article 1.28(b) of the Draft Amendment and Article 124 of the Land Law 2024.
8 Article 1.28(b) of the Draft Amendment and Article 124 of the Land Law 2024.
9 Article 1.13 of the Draft Amendment.
10 Article 116 of the Land Law 2024.
11 Article 1.23 of the Draft Amendment.
12 Article 1.6 of the Draft Amendment.
