Land prices to be determined based on data
One of the key issues under consideration is the methodology for determining land prices.
Under the Government’s proposed approach, land prices would be determined based on available data, appropriate valuation methodologies, and connections with relevant specialized databases. The aim is to improve transparency and limit distortions caused by inaccurate or incomplete market information.
Land prices are a major component of development costs for real estate projects. Therefore, improving the valuation process and simplifying administrative procedures could help control project input costs, which may in turn affect the prices of homes and other real estate products.
Proposed changes to compensation, support and resettlement policies
The draft amended Land Law also proposes shifting the focus from simply compensating for acquired assets toward ensuring people’s living conditions and livelihoods after land acquisition.
Under this approach, people whose residential land is acquired could be prioritized for compensation in the form of residential land or housing at or near their existing location where appropriate.
Another issue under discussion is the proposal not to prescribe rigidly that compensation, support and resettlement plans must always be approved before a land acquisition decision is issued. Instead, detailed procedures would be determined by the Government.
Some lawmakers have called for stronger safeguards to ensure that affected residents receive not only compensation for their property but also adequate housing, employment, income and livelihood support following relocation.
Apartment building lifespan linked to structural safety
The issue of apartment building service life remains a major topic in the proposed amendments to the Housing Law.
Under the proposed framework, the service life of an apartment building would be determined based on its design documents, actual operating period and inspection results. Once the prescribed period has elapsed, the building would be assessed for safety to determine whether it can continue operating, requires renovation or must be rebuilt.
If a building no longer meets technical and safety requirements and needs to be reconstructed, the property rights of apartment owners would continue to be protected under the law.
Some lawmakers have emphasized the need for clear terminology to avoid confusing the service life of a building with the ownership rights to an apartment. This distinction is particularly important for homebuyers, as an apartment is often one of the most valuable assets a household owns.
The draft amended Housing Law is expected to introduce more detailed provisions on rental housing, including housing developed with state and non-state capital, as well as accommodation for workers, experts and employees.
For state-funded rental housing, the draft proposes establishing a housing fund to expand supply. Funding could come from the state budget, proceeds from the sale of public assets, auctions of land-use rights for social housing development, and other lawful sources.
For private developers participating in the rental housing sector, the draft considers a number of support mechanisms, including access to preferential financing, exemptions or reductions in certain land-related financial obligations, infrastructure support and planning-related incentives.
The policy direction is intended to increase the supply of rental housing, particularly in major cities, industrial parks, economic zones and other areas with high housing demand.
The proposed amendments also consider the use of tax policies and other financial instruments to discourage speculation, land hoarding and leaving land unused for extended periods.
For projects that are delayed, a mechanism under which financial obligations increase progressively over time is being considered. The objective is to encourage landowners and developers to put land and projects into effective use.
The draft also incorporates the policy direction of restricting land subdivision and plot sales in urban areas, particularly major cities.
Proposed safeguard for the remaining 5% of the contract value
The draft amended Law on Real Estate Business also introduces notable changes concerning payment for future-formed housing.
Under the proposal, developers would still be prohibited from collecting more than 95% of the contract value if buyers have not yet received the certificate of land use rights and ownership of assets attached to the land.
For the remaining 5%, the draft proposes placing the amount in a blocked account at a credit institution or applying another security mechanism agreed upon by the parties. The funds would be released once the developer completes the procedures for issuing the certificate to the buyer.
Some opinions suggest that this mechanism could create an additional incentive for developers to complete certification procedures after handing over homes. However, controlling only the final 5% may not be sufficient to address risks if a project encounters difficulties or the developer becomes unable to fulfill its obligations.
As a result, there have been proposals to strengthen oversight of buyers’ advance payments throughout the project implementation process, helping reduce the risk of customer funds being used for inappropriate purposes.
Three laws could reshape the real estate market
The proposed amendments to the Land Law, Housing Law and Law on Real Estate Business are being considered with numerous provisions directly related to land pricing, project development, homebuyer protection, resettlement and real estate business activities.
If enacted, these changes could have a significant impact on how developers structure and implement projects, how land-related costs are determined, the supply of housing and mechanisms for protecting buyers in real estate transactions.
