Transitional provisions of the Decree on the development and management of social housing in Vietnam from August 1, 2024

Transitional provisions of the Decree on the development and management of social housing in Vietnam from August 1, 2024 (Photo from the internet)

On July 26, 2024, the Government of Vietnam issued Decree 100/2024/ND-CP, detailing certain provisions of the Housing Law 2023 on the development and management of social housing in Vietnam.

Transitional provisions of the Decree on the development and management of social housing in Vietnam from August 1, 2024

- For social housing construction investment projects implemented under the Build-Transfer (BT) model according to the provisions of Decree 100/2015/ND-CP, the handling of transitions will follow legal regulations on investment in the public-private partnership form.

- For commercial housing, urban area construction investment projects that have decisions or approvals for investment at the time of Decree 100/2015/ND-CP, Decree 49/2021/ND-CP, Decree 35/2023/ND-CP, the investor shall continue to fulfill social housing obligations according to the aforementioned Decrees. In case of adjusting the project implementation progress, the legal regulations on investment shall apply.

- In cases where social housing construction projects have been decided or approved for investment; investment project approval; project decision/approval before the Housing Law 2023 took effect, the project investor will continue to enjoy preferential mechanisms from the approved documents, unless the Housing Law 2023 and this Decree provide new or higher investment incentives, which will apply for the remaining duration of the investment incentives.

- For commercial housing projects under 10 hectares, investors who have been approved to fulfill social housing obligations in cash before this Decree takes effect but have not paid yet by the time this Decree becomes effective must pay an amount equivalent to the land levy value of 20% of the project’s infrastructure-developed residential land area according to the land law regulations at the time the competent authority issues a document permitting the investor to fulfill social housing obligations in cash.

- For commercial housing development projects, urban development investment projects that have selected investors before the effective date of this Decree but have not allocated land for social housing construction as per the housing law at the time of investment approval, if the project is revoked after this Decree takes effect and given to another investor, the original project investor must organize, adjust the planning to provide supplementary residential land funds within the project for social housing construction as stipulated in Article 17 Decree 100/2024/ND-CP.

- For social housing construction projects that receive incentives according to point b, point c clause 1 Article 9 of Decree 100/2015/ND-CP (amended at point a clause 8 Article 1 Decree 49/2021/ND-CP, clause 2 and clause 5 Article 6 Decree 35/2023/ND-CP), if transferring commercial business works, commercial houses within the preferential area, no land levy exemption/reduce amount already waived must be paid.

- For social housing construction projects already decided or approved for investment; investment project approval; project approval and that have received land levy, land rent waiver/reduction before the Housing Law 2023 took effect, the preferential treatment received will not be recalculated, and correctly determined land levy, land rent will remain as per the policy at the time.

- Investors of social housing construction projects not using capital sources or methods specified in clause 1 Article 53 of the Housing Law 2014 (amended at point b clause 6 Article 99 of the Investment Law in the Public-Private Partnership (PPP) Form 2020) for leasing, hire-purchase, sales are exempt from land levy, land rent as per point a clause 2 Article 85 Housing Law 2023.

Provincial People's Committees consider, decide on reimbursement or deduction from the investor's payable financial obligations to the State, including compensation costs and site clearance (if any) in cases where the investor has paid land levy upon state land allocation or acquired land use rights from others which are used to construct social housing or paid land levy for 20% of the land fund according to Article 5 Decree 100/2015/ND-CP (amended at clause 4 Article 1 Decree 49/2021/ND-CP).

- For social housing construction projects in the process of selecting an investor as per Decree 49/2021/ND-CP but not yet finalized by the time this Decree takes effect, continue to follow Decree 49/2021/ND-CP.

- For social housing sales that require land levy payment as per Decree 100/2015/ND-CP (amended per Decree 49/2021/ND-CP) pre-effective date but unpaid post-effective date, payment continues per Decree 49/2021/ND-CP.

- Registration, file review, price appraisal, contract signing, sales, hire-purchase, rental, resale of social housing as per Decree 100/2015/ND-CP (amended as per Decree 49/2021/ND-CP) pre-effective date but pending post-effective date to adhere per Decree 49/2021/ND-CP.

- For social housing construction projects rented out 20% of social housing floor area per clause 2 Article 26 Decree 100/2015/ND-CP, if the renter desires to purchase the housing pre-5 years, the investor may sell the house to the renter if compliance with subject and conditions of this Decree is met.

- For projects in the investment decision, approval phase before this Decree's effective date but with detailed plans not appropriate for overall planning, conformity will be assessed by general, sector planning, and land use coefficient or construction density per Housing Law No. 65/2014/QH13 and guidance documents.

- Loans under signed Credit Agreements with the Social Policy Bank for social housing purchase, hire-purchase, new construction, or renovation/repair per Article 16 Decree 100/2015/ND-CP (amended per Decree 49/2021/ND-CP) pre-effective date, continue borrowing under interest rates in clause 4 Article 48 of this Decree for actual principal and overdue principal (if any).

For more details, visit Decree 100/2024/ND-CP, which comes into force in Vietnam from August 1, 2024.

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