On November 30, 2024, the National Assembly passed Resolution No. 171/2024/QH15, piloting the implementation of commercial housing projects through agreements for land use rights acquisition or existing land use rights ("Resolution 171"). It can be assessed that Resolution 171 establishes an essential legal foundation to address long-standing legal obstacles regarding land use rights in real estate projects, while also imposing strict conditions to align with the experimental nature of such a resolution.
This article will analyze and evaluate key points of Resolution 171 as follows:
1. Authorization to pilot a special mechanism for commercial housing projects
Since the enactment of the 2013 Land Law and the 2014 Housing Law, developers of commercial housing projects (except those acquiring land use rights through auction or tender) must already "possess" residential land use rights and are not allowed to acquire such rights via transfer for implementing housing projects. However, the availability of residential land or land parcels partially classified as residential for development is limited, especially in urban areas, creating significant challenges for real estate developers under current legislation.
To address this "bottleneck," Resolution 171 allows the implementation of housing projects by acquiring land use rights or utilizing existing land use rights. Specifically, project developers are permitted to acquire, transfer, and repurpose the following types of land under the pilot scheme:
a) Agricultural land;
b) Non-agricultural land, excluding residential land;
c) Residential land and other types of land within the same parcel, provided there is an agreement for land use rights transfer.
2. Conditions for projects under the special mechanism
Given the pilot nature of Resolution 171 and to prevent "indiscriminate" proliferation of commercial housing projects, strict conditions must be adhered to:
2.1. Only applicable to pilot projects
Not all commercial housing projects are eligible for the special mechanism. Instead, only pilot projects meeting the following criteria may apply:
a) Located in urban areas or areas designated for urban development in planning documents;
b) The total residential land area within pilot projects (including existing residential land and land to be converted into residential land) must not exceed 30% of the increase in residential land in the relevant planning period, compared to the existing residential land use area, as specified in the provincial land use plan for 2021-2030;
c) Not included in the categories specified under Clause 4, Article 67 of the Land Law (i.e., projects not listed in the district-level annual land use plan and not required to be included in the said plan);
d) For cases under point (a) above, the land intended for the pilot project must not fall under the list of land to be acquired for public projects as approved by the provincial People’s Council.
The provincial People’s Committee is responsible for submitting the list of land areas proposed for pilot projects to the provincial People’s Council for approval alongside the list of projects requiring land acquisition.
The essence of Resolution 171 is to discourage widespread adoption of the special mechanism, limiting its application to projects in urban areas to meet the rapidly increasing housing demand while maintaining balanced land use for other purposes.
2.2. Pilot projects and developers must also meet relevant legal requirements
Resolution 171 further specifies that pilot projects must comply with the following conditions:
a) The land area or parcel for the project must align with the district-level land use plan or urban development plan;
b) The project site must align with the approved local housing development program or plan;
c) The land area for the project must be included in the list of land areas proposed for pilot projects approved by the provincial People’s Council;
d) Approval from the provincial People’s Committee is required for agreements on acquiring land use rights for implementing pilot projects, where applicable;
e) Real estate businesses must comply with the requirements set out in relevant laws on land, housing, real estate business, investment, and other applicable regulations.
The conditions stipulated in Resolution 171 largely align with existing regulations for commercial housing projects, ensuring facilitation without imposing new burdens on developers under the special mechanism.
3. Implementation of Resolution 171
Resolution 171 takes effect on April 1, 2025, and will be implemented for a period of five years. Upon the expiration of Resolution 171, real estate businesses already executing pilot projects may continue their implementation as per the approved project timelines. Additionally, individuals acquiring land use rights or ownership of assets attached to land within such projects will retain the corresponding rights and obligations as prescribed by law.
Essentially, the upcoming five years represent a "golden period" for developers to capitalize on this special mechanism, proactively formulating business strategies to implement housing projects and promptly increase housing supply.
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