The Vietnam Federation of Commerce and Industry (VCCI) has just had some comments on the proposal to develop a Resolution on piloting the implementation of commercial housing projects through agreements on receiving land use rights or having land use rights for other land (hereinafter referred to as the draft).

According to VCCI, allowing enterprises to receive transfers of other land use rights and allowing enterprises that own other land to carry out commercial housing projects is one of the major and important recommendations of enterprises in the process of drafting the 2024 Land Law.

The new 2024 Land Law stops at stipulating that enterprises are only allowed to receive transfers of residential land, and enterprises that already have residential land or residential land and other land are allowed to carry out commercial housing construction investment projects.

VCCI highly agrees with the development of a pilot Resolution allowing enterprises to receive the transfer of other land use rights, allowing enterprises that own other land to carry out commercial housing projects. This is a very necessary regulation, meeting practical needs, overcoming current difficulties and removing difficulties of many current projects.

Regarding the subjects of application, the draft proposal is defining the subjects of application as "enterprises with real estate business functions according to the provisions of the law on real estate business; land users according to the provisions of the Land Law".

"Land users" as stipulated in Article 4 of the 2024 Land Law includes "enterprises with real estate business functions". Therefore, VCCI believes that it is not necessary to stipulate "enterprises with real estate business functions" as the applicable subjects.

Regarding the transferred land, according to VCCI, Clause 2, Article 127 of the 2024 Land Law stipulates that in the case where the transferred land area has "land area managed by a State agency or organization but cannot be separated into an independent project, the land area managed by a State agency or organization shall be included in the total land area for project establishment and shall be recovered by the State to be allocated or leased to investors to implement the project without having to go through the form of auction of land use rights, without having to bid to select investors to implement projects using land".

The draft resolution is providing a mechanism for receiving other land transfers for commercial housing construction similar to the mechanism for receiving land use rights as prescribed in Point b, Clause 1, Article 127 of the 2024 Land Law. To facilitate the implementation process, VCCI proposes to consider adding a land recovery mechanism similar to the provisions in Clause 2, Article 127 of the 2024 Land Law mentioned above.

Proposal to consider general criteria

Notably, regarding the implementation area, the draft is proposing that localities will issue criteria on area, investment capital and other criteria suitable to local reality to select projects in the area allowed for piloting.

Considering that this proposal may create concerns about the request-grant mechanism when determining investment projects to apply the pilot mechanism, VCCI suggests considering stipulating common criteria right in the resolution, localities will rely on this criterion to determine suitable projects.

The Ministry of Natural Resources and Environment is proposing to draft a National Assembly Resolution on piloting the implementation of commercial housing projects through agreements on receiving land use rights or having land use rights that are not residential land.

According to this ministry, after the 2024 Land Law comes into effect, the real estate market is expected to have only commercial housing projects, which are urban construction investment projects and rural residential area projects formed through the State's land acquisition or projects that have converted land use purposes to commercial housing due to the existence of residential land and other land as prescribed in Clause 6, Article 127 of the 2024 Land Law.

This will limit the development of the real estate market, failing to fully implement the policy of Resolution No. 18-NQ/TW on "continuing to implement the mechanism of self-negotiation between people and enterprises in transferring land use rights to implement urban and commercial housing projects".

In addition, the 2024 Land Law only allows investors who have the right to use residential land or residential land and other land to change the land use purpose to implement commercial housing construction investment projects (paragraph 2, clause 6, article 127).

This will lead to production and business projects, for example industrial parks and tourist areas whose land use planning has been adjusted by the State to residential land, not being able to implement the adjusted planning, leading to waste of state budget in the work of establishing and adjusting land use planning.

The Ministry of Natural Resources and Environment believes that the above issues require the development of a resolution of the National Assembly to allow the pilot implementation of commercial housing projects through agreements on receiving land use rights or having land use rights that are not residential land to allow organizations to implement them in practice.

The Ministry of Natural Resources and Environment plans to propose a 5-year pilot period, starting from January 1, 2025. Priority will be given to piloting in urban areas and areas with approved urban development plans.