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The Promulgation of Decree No. 148/2020/ND-CP Will Save Hundreds of Real Estate Projects

The government has issued Decree No. 148/2020/ND-CP, amending and supplementing a number of articles of Decree No. 43/2014/ND-CP dated May 15, 2014 of the Land Law. The key highlight of Decree No. 148/2020/ND-CP is that it allows small alternating land parcels in the projects to be handed over or leased, instead of being auctioned for sale. The promulgation of such a decree is expected to remove the “waiting status” of thousands of real estate projects that cannot be put into exploitation due to restraints from alternating land problems.

In order to be allocated for usage or lease, the land parcels must be managed by the State and must meet the following criteria:

  • Listed by any competent state agency in the land acquisition category; land that has not been handed over, leased, or land that is under-regulated management

  • Land parcels with total area or shape fall short of standards (area, minimum size) to be considered a separate parcel according to the regulations of the provincial People's Committee.

  • Land parcels complying with the master plan, detailed urban construction plannings, rural residential quarter construction plannings, new rural commune construction plannings approved by competent state agencies.

  • Land parcels not listed in areas that have identified projects or construction works within the master planning approved and publicly announced by competent agencies.

  • Land parcels, which are expected to be allocated or leased, are free from disputes, complaints, violations, or should dispute, complaints, or violations happen, the land already has a written settlement in accordance with the law.

Moreover, Decree No. 148/2020/ND-CP also states clearly the purposes, duration, and land fees for these narrow, alternating land parcels in projects:

  • Purposes: Preferred for public purposes; if for other purposes - the developer of the project next to the land parcel can pay a levy to the government and take that small land parcel.

  • Duration: The duration of the small land parcel is matched with the duration of the developer’s bigger land plot in the project

  • Land fees: The provisions of Article 114 of the Land Law will act on two land prices:

- Land price used for calculating the collection of land use levies or land rents when the State allocates or leases land without through auction of land use rights

- The starting price for land use right auction upon land allocation or land lease is the specific land price decided by the Provincial People's Committee.

Decree 148/2020 / ND-CP takes effect from February 8, 2021.

According to Mr. Le Hoang Chau, President of HoRea, the real estate market faced great difficulties in the two years 2018 - 2019 with a diminishing supply, lack of housing products - especially affordable housing. One of the reasons for the trouble is due to land interlocking in numerous projects that are being implemented.

The promulgation of Decree No. 148/2020/ND-CP will blow a wind of change to the bloomy landscape of the real estate market in resuming long-stalled projects, increasing the housing supply for the market, and boosting the state budget revenue. Understanding the Vietnam market with its new legal framework and business opportunities in this new scene is obviously crucial for investors. Let Broad Avenue Team spare your company the trouble of the complicated new laws and help cut short your journey to success, with our core team of professionals having Ivy-League background and 50+ years of experience in real estate, finance, and analysis!

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