Vietnam's Prime Minister says high land prices hurt the economy as government proposes three-year land price tables

Prime Minister Le Minh Hung told Vietnam's National Assembly that the State has to manage and regulate land prices because expensive property does serious damage to economic development, VnExpress reported. He spoke for more than half an hour at a group discussion on the afternoon of 22 October, as lawmakers debated amendments to the Land Law, the Housing Law and the Law on Real Estate Business. Earlier that day the government submitted its draft amended Land Law, which proposes setting provincial land price tables every three years rather than every year.

What the draft changes

According to VnExpress, Justice Minister Hoang Thanh Tung presented the bill on the morning of 22 October on behalf of the Prime Minister. The government argues that the 2024 Land Law, after two years in force, still has bottlenecks that must be cleared if the country is to pursue double-digit growth. The main proposals on land finance are:

• Scrapping the specific land valuation mechanism and land valuation consultants. The State would set land prices under four principles, based on land data and balancing the interests of the State, land users and investors.
• Land price tables and the price adjustment coefficient (the K coefficient) would be decided by provincial People's Councils once every three years, with revisions allowed when infrastructure, zoning, land-use plans or administrative boundaries change. Under the current law, the tables are revised annually and apply from 1 January of the following year.
• The same tables would be used to calculate land revenue for the budget, starting prices at land auctions and compensation when the State recovers land, and would serve as one basis for land taxes and fees.
• A first legal definition of abandoned land. Farmland unused for more than 24 months could be recovered if the user has been fined and still fails to put it to use by the deadline. Developers of idle project land would pay a progressive annual surcharge, and the land would be recovered if it is still unused after 60 months.

Phan Van Mai, chairman of the Economic and Finance Committee, asked that price tables keep land accessible to people without land-use rights and that the three laws take effect in a consistent way. VnExpress said the draft has 112 articles, 148 fewer than the current law.

Why the Prime Minister wants State control

Hung said the proposal puts the Party Central Committee's Resolution 21 into law. The earlier Resolution 18 tied land prices to the market, which pushed localities to base input prices on very high auction results. Costly land raises project costs and therefore home prices, he said, while developers also carry loans and lengthy paperwork. Localities may collect strong budget revenue for a while, he added, but the wider economy pays heavily, and priority groups such as civil servants, workers, students and the armed forces would never be able to afford homes.

On housing, the draft splits homes into four groups. Commercial housing would follow the market, while the State would prioritise rental housing as a strategic pillar, with rents capped by provincial authorities. Social housing could only be resold, after five years, to people who qualify for it. Hung said the amended Land Law is expected to take effect in 2028, in step with work on the national land database.

What lawmakers asked for

Baochinhphu.vn, the government's news site, reported broad support for the bill in group discussions, along with requests for changes. Nguyen Khanh Vu (Quang Tri) backed using price tables instead of specific valuations but noted press reports that compensation for residential land in many places is below 50% of market value. He proposed a minimum compensation ratio of 100%, to be set by provincial People's Councils rather than People's Committees, and said about 90% of complaints relate to land. Le Nu Thuy Duong (Dong Nai) proposed choosing investors by capability criteria instead of auctions for some commercial and logistics land. Ta Thi Yen (Dien Bien) wanted livelihoods to count when resettlement is judged.

On the real estate bill, VnExpress reported that deputy Bui Xuan Hai, rector of Hai Phong University, supports keeping the 5% cap on deposits for off-plan homes but wants developers to collect them earlier, once a project has investment approval, a 1/500 detailed plan and a building permit, rather than waiting for construction to start, with the money held in a blocked bank account. Deputy Pham Hung Hung (Phu Tho) proposed mandatory notarisation of such deposit contracts.

Key dates

Compiled by KBVN+ from VnExpress:

For households and businesses, the price tables matter because they feed into compensation, auction prices and land charges. Under the draft they would change every three years unless infrastructure or zoning shifts.

What comes next

The National Assembly will debate the Land Law bill in plenary on 29 October and is scheduled to vote on 21 November, according to VnExpress. The deputies' proposals on minimum compensation, investor selection and deposits are still suggestions; the sources do not say how the drafting agency will respond. VnExpress did not give a separate vote date for the housing and real estate bills.