Land Law "attracts" remittances into real estate, increasing social housing supply

The 2024 Land Law is expected to meet practical requirements and remove obstacles at the grassroots level to revive the real estate market. Therefore, instead of taking effect from January 1, 2025, the Prime Minister has requested ministries and branches to complete their assigned tasks to have a basis to propose to the National Assembly to allow this law to take effect from July 1.

According to experts, the law will have a strong impact when it comes into effect, with the two groups that will benefit the most being overseas Vietnamese and those who are resettled and compensated. The supply of social housing is also expected to increase sharply thanks to preferential policies and new support.

"Suck" remittances

Associate Professor - Dr. Nguyen Lu Phuong, Ho Chi Minh City University of Natural Resources and Environment, said that the 2024 Land Law has more clearly defined the regulations on land users being Vietnamese people residing abroad.

Mr. Phuong analyzed that previously, the law stipulated that foreigners or Vietnamese people residing abroad were not eligible to buy houses attached to land use rights in Vietnam. However, the 2024 Land Law stipulates that people of Vietnamese origin residing abroad are allowed to enter Vietnam; to buy, lease-purchase houses attached to land use rights, and receive land use rights in housing development projects.

The 2024 Land Law also provides more specific regulations on the rights and obligations of people of Vietnamese origin residing abroad, economic organizations with foreign investment capital using land to implement investment projects in Vietnam; people of Vietnamese origin residing abroad are allowed to lease land and collect annual land rent...

With the above regulation, Mr. Troy Griffiths - Deputy Managing Director of Savills Vietnam said that the Land Law 2024 will bring more investment opportunities for the group of real estate buyers who are overseas Vietnamese. This change also creates great potential for the market thanks to direct investment capital from overseas Vietnamese.

Previously, overseas Vietnamese who wanted to invest back in Vietnam had to go through relatives or family members, which led to some unnecessary disputes. By resolving this issue, the law will create more favorable conditions for investment and minimize the possibility of risks between parties during the investment process.

Batdongsan.com.vn’s strategic director Le Bao Long also said that real estate consumers will benefit from changes in the law. The two groups that will benefit the most are overseas Vietnamese and those who are resettled and compensated.

Citing evidence, Mr. Long said that according to statistics, about 15-20% of remittances are invested directly in real estate. Changes in the law create a more formal legal framework and more flexible policies, stipulating that overseas Vietnamese are allowed to transfer land use rights (previously only leased, authorized to manage unused houses).

"This will further expand opportunities to attract foreign capital into the real estate market," Mr. Long emphasized.

In addition, according to Mr. Long, people who are subject to resettlement and compensation will also have their rights guaranteed; households and individuals will be given opportunities to have jobs, income, and stabilize their lives and production.

The 2024 Land Law also stipulates that resettlement areas must complete conditions on technical infrastructure, social infrastructure, and ensure the lives of residents...

Improving social housing supply

According to experts, speeding up the 2024 Land Law to take effect soon will stimulate the supply of social housing and at the same time encourage businesses to be more "aggressive" in participating in the development of this type of housing.

Experts believe that from the time the 2024 Land Law is passed until July 1, 2024, there is enough time to bring the legal regulations to the people, businesses and state agencies, helping them understand and grasp the spirit of the 2024 Land Law. If passed, this will help the supply of social housing in the coming time "explode", especially in large cities such as Hanoi and Ho Chi Minh City, thereby meeting the current great demand for housing.

According to Mr. Le Bao Long, the supply of social housing is expected to improve with preferential policies and new supports, along with regulations requiring provincial people's committees to allocate enough land for social housing.

The 2024 Land Law and the 2023 Housing Law also added two more forms of social housing development, including foreign capital, foreign organizations and trade union financial resources for workers to rent social housing.

Along with that, the law stipulates that in case the investor is allowed to reserve 20% of the infrastructure area for business, enjoy all profits and be exempted from land use and rent fees, and does not have to carry out procedures to determine prices and request exemptions.

In addition, Mr. Long predicts that the quality of real estate projects will also be improved thanks to stricter regulations on handover standards and progress.

With the above adjustment, in Resolution No. 01/NQ-CP dated January 5, 2024 on the main tasks and solutions to implement the Socio-Economic Development Plan and State Budget Estimates for 2024, the Prime Minister assigned that in 2024, the whole country strives to complete about 130,000 social housing units.

Deputy Minister of Construction Nguyen Van Sinh said that to achieve the set goals, the agency proposed that ministries and branches focus on developing a Decree guiding the 2023 Housing Law to remove obstacles in mechanisms, policies, and laws, effectively implement and promote the development of social housing.

The Ministry of Construction is also coordinating with relevant ministries and branches to contribute ideas to the drafting of decrees guiding the Law on Real Estate Business, the Land Law (amended), the Law on Credit Institutions, and amendments to tax laws, etc.

Currently, the Ministry of Construction, the Ministry of Natural Resources and Environment, and the Ministry of Finance are focusing on studying draft decrees guiding the 2023 Housing Law and the 2023 Real Estate Business Law, the 2024 Land Law and the 2024 Credit Institutions Law, to submit to the Government for consideration and promulgation in May; as a basis for the Government to consider and submit to the National Assembly to allow the above laws, especially the 2024 Land Law, to take effect earlier - expected from July 1, 2024.