On 20 July 2026, the Vietnamese Government released Draft Law No. 01 ("Draft") proposing a significant overhaul of the Land Law 2024, framed primarily as a technical alignment with the new two-level local government model. The Draft would also introduce substantive changes to land pricing, expand the cases where the State may recover land, recalibrate enforcement for unused land, and introduce broad digital compliance obligations.

The National Assembly is expected to consider the Draft at an extraordinary session in August 2026, with final passage anticipated at the regular October 2026 session. The proposed effective date is 1 March 2027. The public consultation window closes 10 August 2026.

• Land pricing changes: Specific land prices mechanism removed; replaced by provincial adjustment coefficients.
• Decentralization: District tier removed; authority split between provincial and commune levels.
• Site assembly: State may compulsorily recover residual land once investor exceeds the 75% agreement threshold.
• Unused land enforcement: Fixed 24-month extension window removed; administrative sanction may more directly lead to recovery without compensation.
• Broader State recovery cases: Expanded categories of qualifying projects — including logistics centers, free trade zones, and social rental housing.
• Digital compliance: National land database to be completed by end-2026; mandatory digital registration and non-cash payments from 2027.

1. Land pricing: From case-by-case valuation to provincial coefficients

• Under the Draft, all land levies, lease payments, compensation for State-recovered land, and auction starting prices will be calculated using Annual Land Price Lists and adjustment coefficients determined by Provincial People's Committees.
• The current "specific land price" mechanism — while imperfect — provides a structured, appraisal-based process that investors can engage with, challenge, and build financial models around. Its removal creates a gap that awaits guidance at the Government decree level: who calibrates the coefficients, how, and on what basis is left largely to provincial discretion. For investors in M&A, project finance, or compensation negotiations, it remains to be seen how the restructured pricing regime will work.

2. Decentralization: Faster decisions or greater fragmentation?

The Draft reallocates responsibilities within the land administration system in anticipation of a streamlined local government structure, moving away from the current three-tier (provincial–district–commune) model. The district level is effectively removed as a decision-making tier in land administration. Accordingly, provincial-level authorities would handle land decisions for organizations and foreign-invested enterprises, while commune-level People's Committees would have direct authority over land recovery, allocation, and leasing for individuals and households.

A key implementation question is institutional capacity. Commune-level authorities may need time and resources to manage more complex land decisions at scale. For investors working across multiple provinces or with mixed land ownership structures, there may be greater potential for procedural inconsistency and interpretive divergence, particularly in the period immediately after the Law takes effect.

3. The "over 75%" mechanism: Rebalancing voluntary acquisition

The Draft introduces a new case of State land recovery where, for agreement-based projects, the investor has obtained agreement from more than 75% of land area and more than 75% of the number of existing land users, and the negotiation deadline has expired — in which case the Provincial People's Council may approve recovery of the remaining land area.

This would represent a notable intervention in the voluntary land assembly process. Key points that may require further clarification include: the documentation required to establish the 75% thresholds; the timeframe and basis for Provincial People's Council approval; and the protections available to holdout landholders. Deal dynamics in ongoing agreement-based projects shift once this mechanism is enacted.

4. Unused land enforcement: A stricter approach

The current Land Law 2024 gives investors a defined runway: a project not put into use within the required period may receive an extension of up to 24 months upon payment of an additional sum, after which recovery without compensation follows. The sequence and timeline are clear.

The Draft replaces this with a conduct-based test: recovery without compensation is triggered where an investor has been administratively sanctioned for non-use and continues to violate after sanction. The removal of the fixed 24-month extension as a planning reference point means enforcement timing will now depend on when local authorities make decisions to issue sanction notices — a variable that may be difficult for investors to anticipate or manage. For projects experiencing permitting delays or force majeure events, this may create a more challenging enforcement environment than under the current law.

5. Expanded recovery grounds

The Draft broadens the categories of project qualifying for compulsory State recovery to include social rental housing, digital technology concentration zones, free trade zone projects, international financial center projects, and large-scale logistics centers linked to ports, airports, and inland waterways. Existing landholders in areas that may be targeted for such uses — and investors in projects that would trigger compulsory acquisition of third-party land — should assess their exposure under the expanded list.

6. Digital compliance: Tight deadlines and system challenge

The draft supports the national land information system as the backbone of administrative reform and digital transformation in the land sector, with the system designed to connect and share data across national databases to build e-government and advance Vietnam's digital economy and digital society.

Specific transitional targets include: completion of the digital database for all land parcels whose information is collected by end of 2026; completion of a centralised, unified National Land Information System with full interconnection with other national databases; and a commitment to complete cadastral surveying and mapping, land registration, cadastral records, and database coverage for remaining areas by end of 2027.

Land transactions must be registered through digital platforms, with non-cash bank payment requirements applying to relevant financial obligations.
Investors with large or complex land portfolios — particularly those with legacy paper-based records, incomplete cadastral documentation, or land in areas with limited local administrative capacity — should monitor implementation closely, as local registration offices may face capacity constraints in processing the required volume of work within these deadlines.

The public consultation window closes 10 August 2026. This is an immediate opportunity for businesses and investors to submit formal comments to the Ministry of Agriculture and Environment before the Draft is finalised. Given the material changes proposed — particularly on pricing, enforcement, and site assembly — participation in the consultation process is worth considering for clients with significant land interests.

Beyond consultation, three questions require immediate attention for any client with existing or planned land interests in Vietnam:

1. Pricing exposure: How will the removal of specific land prices affect your financial obligations, compensation entitlements, or valuation assumptions in current or pending transactions?
2. Project land assembly: If you are mid-negotiation on an agreement-based project, how does the proposed "over 75%" recovery mechanism change your strategy and risk profile?
3. Enforcement risk: Do any of your projects involve land that is not yet in use? If so, what is your exposure under the new administrative non-compliance trigger, and what steps should be taken before 1 March 2027?

Please contact us to discuss how the proposed amendments affect your specific situation and whether formal consultation submissions are appropriate.