The regulation on 20% of the land fund for social housing in Vietnam will be revised

Linh Gia April 12, 2022

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The area of the land fund is reserved for social housing development or an investment project to build commercial housing; urban areas are defined as 20% of the total residential land area. The zoning plans have allocated a land fund of 20%; According to regulations, investors of these component projects still have to set aside 20% of the land fund. This may disrupt the zoning plan approved by the competent authority. Therefore, the Ministry of Construction has proposed amending a number of regulations related to the land fund for social housing. To learn more, today, LSX Lawfirm will give you an article about “The regulation on 20% of the land fund for social housing in Vietnam will be revised“, as follows:

Legal grounds

Decree No. 49/2021/ND-CP

Decree No. 100/2015/ND-CP

The setting aside of land funds for the construction of social housing for commercial housing projects; urban areas are defined in Decree No. 49/2021/ND-CP as follows:

“Article 5. Land fund for social housing development, for investment projects to build commercial houses and urban areas

1. In case of investment projects on the construction of commercial houses or urban areas with a land-use scale of 2 hectares or more in special grade and grade I urban centers or 5 hectares or more in grade-I urban centers Type II and III must spend 20% of the total residential land area in detailed planning projects approved by competent authorities, having invested in building technical infrastructure for social housing construction.

2. In the case of investment projects for the construction of commercial houses and urban areas, the land use scale is less than 2 hectares in special grade and grade I urban centers or less than 5 hectares in grade II cities and Type III, the investor is not required to set aside 20% of the land fund and is obliged to pay land use levy for the entire project’s land area in accordance with the land law.”.

If Decree No. 100/2015/ND-CP allows urban development investment project owners with a land-use scale of fewer than 10 hectares, they can choose between the forms of setting aside 20% of the land fund for housing construction. society; allocation of equivalent housing funds; or pay in cash equivalent to the value of that land fund; then Decree No. 49/2021/ND-CP tightens up on projects that have to spend 20% of the land fund to build social housing.

Specifically, for commercial housing projects with a scale of 2 hectares or more in special urban centers and grade I, from 5 ha or more in urban areas of grades II and III, 20% of the land fund must allocated for social housing. In particular, under this decree; Investors not allowed to pay replacement land use fees if they do not spend 20% of the land fund on the social housing construction project.

So, the area of the land fund reserved for social housing development of an investment project to build commercial houses or urban areas determined as equal to 20% of the total residential land area (invested in the construction of the infrastructure system); engineering) in the 1/500 detailed planning drawing approved by the competent authority of that project.

Adjustment for 20% land fund is no longer suitable

In the past time, The implementation of the above regulations has created a land fund and developed many social houses for those with housing difficulties.

However, there is also a problem, the problem is that for zoning plans where 20% of the land fund has allocated when choosing the investor of the component projects of that plan, the investor of these component projects still has to set aside 20% land fund. This may disrupt the zoning plan approved by the competent authority.

Therefore, Clause 3, Article 5 of Decree No. 49/2021/ND-CP stipulates:

“For the case where the land fund must allocate 20% for the construction of social housing according to regulations, but due to a change in the general planning, zoning planning, and detailed local planning, this leads to the If the 20% land fund is no longer suitable, the provincial-level People’s Committee must report it to the Prime Minister for consideration and approval.”

So The case approved by the Prime Minister, Provincial People’s Committees determine the value of the land use levy payable for 20% of the land fund in the project and remit this money to the local budget to invest in the construction of social housing in the locality.

In addition, the Ministry of Finance is responsible for guiding the management; use of the land use levy payable for this 20% land fund.

However, the actual implementation in some localities is still inadequate and limited in management; use the proceeds from the 20% land fund for social housing development.

So Compulsory spending of 20% of residential land area for construction of social housing will make architecture; landscape, and common space of the whole project not synchronized, lacking in aesthetics; reducing investment efficiency and difficulties in providing services and utilities… This leads to high costs in commercial housing projects; in urban areas.

The Ministry of Construction proposed and submitted to the Government and assigned by the Government to study and develop amendments to the 2014 Housing Law, which proposed to amend and supplement regulations related to the land fund reserved for housing, develop social housing in the direction assigned by the Government to detail regulations then.

Specifically, on how to determine, the percentage of the land fund reserved for housing construction; the arrangement of concentrated social housing in urban areas; the management and use of the land use levy payable to the land fund of 20% in investment projects to build commercial houses and urban areas do not arrange for the land fund reserved for construction of social houses.

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What is social housing?

Social housing means housing with State support for beneficiaries of housing support policies in accordance with the Housing Law. That is, the state will support social housing projects, and homebuyers will enjoy a more favorable price compared to commercial apartments then.

Income conditions to buy social housing?

So to buy social housing; one must not have to pay regular income tax for the following subjects:
+ Firstly, Low-income people, poor and near-poor households in urban areas;
+ Secondly, Employees are working at enterprises inside and outside the industrial zone;
+ Thirdly, Professional officers, non-commissioned officers, professional non-commissioned officers, professional soldiers, workers in agencies and units of the People’s Police and the People’s Army;
+ Finally, Cadres, civil servants, and public employees are in accordance with the law on cadres, civil servants, and public employees.

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