Revision: Clarifying Reasons for Modifying Vietnam's Fresh Land Law

The Vietnamese government has proposed amendments to the 2024 Land Law, with a focus on abolishing the current market-based land valuation system and restoring the State's decisive role in setting land prices. This shift aims to address practical implementation challenges and institutional bottlenecks observed since the law's enactment.

Key aspects of the proposed amendments include replacing the principle of market-based land valuation with four new principles that emphasize the State as the representative landowner with the exclusive right to set and decide land prices. This change responds to difficulties integrating market valuation with existing administrative realities and investor expectations under the 2024 Land Law.

The amendments aim to simplify land pricing processes, reduce conflicts caused by price distortions, and ensure a better balance among State interests, land users, and investors in land transactions. Additionally, while the 2024 Land Law introduced reforms intended to improve decentralization, transparency, and access to land, these innovations encountered hurdles in practical application.

One of the challenges faced by the 2024 Land Law is the reliance on auctions and bidding to allocate land, which is tied to complex regulations. This has led to failed auctions and an inability to select suitable investors, delaying projects. Another issue is the lack of clear mechanisms for the State to recover land for high-priority projects essential for national development.

Article 158 of the new law explicitly states that all land valuation must adhere to market principles. However, the residual method of valuation, a key tool, often fails to capture the future value of a development project, making the resulting prices inherently flawed.

The law dedicates specific articles to the rights and obligations of all citizens regarding land, recognizing the shared national responsibility for protecting and developing this finite resource. It also extends the deadline for households and individuals to have their long-held, non-disputed land officially recognised with a certificate of land use rights.

The first market-based price list is scheduled to take effect nationwide in January 2026. The proposed amendments also address the 'holdout' issue, where a small number of landowners can block projects, and propose to remove the phrase 'market principles' from the law's core valuation article, re-establishing the State's role as the final decider of land prices.

These revisions reflect a pragmatic recalibration of the law's ambitious reforms to better fit Vietnam's land governance and economic context. The amendments aim to resolve implementation challenges, particularly by moving away from market-based land valuation to restore State control over land prices, thus addressing institutional bottlenecks and enhancing the law’s feasibility in practice.

The Vietnamese government's proposed amendments to the 2024 Land Law aim to update the current market-based land valuation system, with the goal of restoring the State's decisive role in setting land prices.
These amendments seek to address practical implementation challenges and institutional bottlenecks observed since the law's enactment, particularly in integrating market valuation with existing administrative realities and investor expectations.
The new principles in the proposed amendments emphasize the State as the representative landowner with the exclusive right to set and decide land prices, replacing the current market-based valuation system.
The amendments are designed to simplify land pricing processes, reduce conflicts caused by price distortions, and ensure a better balance among State interests, land users, and investors in land transactions.
One of the challenges faced by the 2024 Land Law is the reliance on auctions and bidding to allocate land, which has led to failed auctions and an inability to select suitable investors, delaying projects.
The proposed amendments also address the 'holdout' issue, where a small number of landowners can block projects, and aim to resolve this by removing the phrase 'market principles' from the law's core valuation article.
The first market-based price list is scheduled to take effect nationwide in January 2026, but the amendments propose to re-establish the State's role as the final decider of land prices to enhance the law’s feasibility in practice.
The general news, business, and casino-and-gambling sectors, as well as sports and culture, may be impacted by these changes in land governance and the economy, as they rely on land transactions and development for their operations.