Question: I have been informed that since Decree No. 148/2020/ND-CP took effect on February 8, 2021, it has caused a strong impact on the real estate market by restricting land subdivision and sale in certain areas. I heard that from January 1, 2025, land subdivision and sale will be even stricter than this regulation. Is that correct? I would appreciate legal advice on this matter. Thank you.
Answer:
Thank you for sending your question to FDVN Law Firm. Regarding your consultation requests, after studying the relevant legal provisions, FDVN has the following exchanges:
According to current regulations in Clause 2, Article 41, Decree No. 43/2014/ND-CP as amended by Article 1, Decree No. 148/2020/ND-CP, the investor of a housing construction business project for sale or for combined sale and lease may transfer land use rights in the form of land subdivision, land parceling in areas outside the administrative boundaries of wards of special type urban areas and type I urban areas under the Central Government; areas with high architectural landscape requirements, central areas, and areas around architectural focal points in urban areas; frontage of regional roads and main landscape roads in urban areas.
The Real Estate Business Law of 2023, effective from January 1, 2025, stipulates conditions for land with technical infrastructure in real estate projects transferred for individuals to build houses. Specifically, regarding subdivided and parcelled areas, in Clause 6, Article 31, the Real Estate Business Law of 2023 provides as follows:
“Article 31. Conditions attached to land that already has infrastructure within real estate projects which rights to use are to be transferred to individuals for building housing
…
6. The land lot is not located in any ward, urban district, or city of a special-class or class-I, II or III city; LURs are not put for sale in an auction for constructing a housing investment project as prescribed by the Land Law. For remaining areas, each provincial People's Committee shall, depending on its local actual conditions, determine areas in which rights to use land that already has infrastructure can be transferred by project investors to individuals for building their own housing.”
Accordingly, for land outside the areas of wards, districts, and cities of special urban types, types I, II, and III; not subject to land use rights auction for investment in housing construction projects as stipulated by the Land Law, it can be transferred for individuals to build houses, or in other words, can be subdivided and sold as parcels. For other areas, the provincial People's Committee shall base on local conditions to determine areas where project investors can transfer land use rights with existing technical infrastructure for individuals to build houses.
Therefore, it can be seen that the Real Estate Business Law of 2023 has tightened regulations on land subdivision and sale, expanding the scope of prohibition on land subdivision and sale to include ward, district, and city areas of type II and type III urban areas, and some other areas to ensure urban landscape and infrastructure development.
The above is the legal advice of FDVN related to your consultation request based on research of legal regulations. We hope FDVN's advice will be helpful to you.
Phan Duc Huynh – FDVN Law Firm
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