Creating better conditions for tourism development

Starting from October 23, the 15th National Assembly will give final opinions and pass the revised land law. Are there any outstanding issues to be addressed?

Real estate legal expert Nguyen Van Dinh

Currently, according to the discussion at the 25th and 26th sessions of the National Assembly Standing Committee, there are still 13 issues that have not been agreed upon in the revised land law. The drafting agencies and the agency in charge of verification (the National Assembly Economic Committee) still have different opinions on these issues, so we need to get more opinions from the National Assembly delegates to clarify.

However, according to my observations, some issues that are considered agreed upon still need further research and consideration, such as the issue of land use and land use terms. This content is related to the decision-making authority of the state in its role as representative of the entire people’s ownership of land.

The current Land Law has reasonable regulations for land use terms, ensuring harmony between the interests of the state - businesses - people.

Accordingly, the term of land allocation to investors of housing business projects is determined according to the term of the project (a maximum of 50-70 years), and buyers of houses attached to land use rights are entitled to long-term stable land use.

The current law has regulations on land use regimes. Accordingly, “land for long-term stable use” (including residential land used by households and individuals and “land for limited use,” including commercial and service land, and land allocated to the implementation authority.

Thus, if the state allocates land directly to households, people will be able to use the land in a stable and long term. If the state allocates land to an enterprise to implement a project, the land use rights always have a limited term.

However, in reality, the market movement has increasingly limited the state’s direct allocation of land to households, but that work must now be regulated by the market through real estate projects.

Therefore, the regulations of the 2013 Land Law are reasonable and creative. Accordingly, the state allocates land to businesses for a limited term, the investor sells the product, then the home buyer can use the land for long-term stability. This regulation solves both problems: businesses cannot keep their land (due to not being able to use the land on a long-term basis), but home buyers are still given long-term use books.

However, the land use regime and land use terms in the draft revised Land Law version of September 2023 have changed significantly compared to the current law.

Article 172 of the draft revised law stipulates: “Land users are allowed to use the land for long-term stability in the following cases ...”.

Thus, according to the draft, if it is “residential land”, land users will be able to use the land in a stable and long-term manner. This leads to cases where the state allocates residential land to businesses to implement projects, therefore is also stable and long-term. This is unreasonable because it could lead to businesses holding land but not developing projects, or completing the construction of housing projects without selling the product, by partly or fully retaining the products.

How can this problem be solved?

I recommend that the drafting agency and the agency verifying the law project to preserve and inherit the state’s policy on residential land that has remained stable over time. Specifically, it is necessary to keep unchanged the provisions of the 2013 Land Law. It clearly stipulates that land allocation to project investors always has a time limit, but allows buyers of houses in real estate projects to use them. This provides stable land to create a legal basis for granting a certificate of ownership with a long-term stable duration.

Tourism and entertainment projects, or projects that combine commercial housing with tourism, services, and entertainment, play an important role in economic and social development. What are your thoughts on this?

Currently, cases of land repossess for socioeconomic development for national and public benefits mentioned in Article 79 of the current draft do not include tourism, recreation and entertainment development projects. The draft only stipulates land repossess for mixed housing and commercial and service projects if decided by the provincial people’s council in accordance with local conditions. Thus, the project must have a part of its residential land (to what extent or percentage is not specified) for the state to repossess the land.

I agree that it is necessary to have the state repossess land for tourism, and entertainment projects (without residential function), and in some cases this type of project needs to be encouraged even more than housing development projects.

For example, in locations suitable for tourism, it is necessary to prioritise land repossession to implement key tourism projects, creating motivation for local socioeconomic development, and even creating a spillover motivation for the whole region and wider economy.

Resort real estate struggles to achieve lift off in fickle market Although the real estate market has continuously received positive policies from the government to remove obstacles, resort real estate has suffered hugely in recent years and is showing little sign of recovery, with many properties unfinished and unused.