What is land under planning? Lookup and valuation guide

Land under planning is one of the factors that can directly affect real estate value, construction rights, transferability and the ability to obtain bank financing. However, not everyone clearly understands what land under planning is or whether it can be transferred or developed. This article will help you update the latest regulations under the 2024 Land Law, learn how to check planning information, understand compensation principles when land is recovered and identify important considerations when valuing land under planning before a transaction or investment.

What is land under planning?

Land under planning refers to land located within an area where the competent State authority has determined its intended use under land use planning, construction planning or urban planning for each stage of socio-economic development.

Under the 2024 Land Law, land use planning is an important basis for the State to manage, exploit and use land resources effectively. Planning information directly affects land use rights, construction potential, transferability, mortgage eligibility and real estate value.

In practice, land located within a planning area is not necessarily subject to immediate recovery. Many areas may continue to be used stably for years if there is no implementation plan or land recovery decision.

This is also why many buyers mistakenly purchase land under planning or incorrectly assess the value of the asset during a transaction.

Common types of land under planning

Depending on local development objectives, land may fall under different types of planning such as:

• Residential land planning: Land designated for housing developments, residential areas or urban areas.

• Transport planning: Land located within areas designated for road expansion, expressways, ring roads, bridges or technical infrastructure projects.

• Park and green space planning: Land designated for parks, public squares and urban landscapes.

• Public facility planning: Including schools, hospitals, administrative offices and cultural or sports facilities.

• Industrial zone planning: Land designated for factories, industrial parks, export processing zones or logistics facilities.

• Commercial and service planning: Land designated for shopping centers, hotels, offices, tourism developments or integrated service projects.

Each type of planning has a different level of impact on real estate value and its potential use.

Can land under planning be transferred?

This is one of the most frequently searched questions regarding land under planning.

Land users may still exercise rights to transfer, donate, mortgage or contribute land use rights as capital if the conditions under the 2024 Land Law are satisfied. However, these rights may be restricted in certain circumstances where a land recovery decision has been issued or the land is located within an area subject to an approved land use implementation plan.

In many cases, buyers pay prices comparable to ordinary residential land even though the property is located within an area where a project is about to be implemented, which may result in significant financial losses.

Can a house be built on land under planning?

The ability to construct a house depends on the planning status and the local land use plan. Generally:

• Cases where construction may be permitted:

  • There is no annual land use plan yet.

  • No land recovery decision has been issued.

  • The property meets the requirements for a construction permit under applicable regulations.

• Cases where construction may be restricted:

  • The land is included in the district-level annual land use plan and is subject to recovery or a change of land use purpose.

  • A land recovery notice has been issued.

  • The area is preparing for project implementation.

Therefore, before beginning construction, land users should verify planning information with the competent authority or through the local planning information system.

Can land under planning be granted a Land Use Rights Certificate?

Many people assume that land under planning cannot be granted a Certificate of Land Use Rights.

This is not entirely correct.

The fact that land is located within a planning area does not automatically mean that a Certificate of Land Use Rights cannot be issued. The competent authority will assess the specific legal status, type of planning and eligibility requirements for certification under current regulations.

How to accurately check land planning information

Checking planning information before purchasing, investing in or mortgaging real estate is an important step that helps reduce legal risks and supports an accurate assessment of asset value. Currently, planning information can be checked through several channels:

Check with the Land Registration Office

This is generally the most accurate and reliable method. Land users may request the competent authority to provide information relating to the land parcel such as:

• Extracts from cadastral maps.

• Information on planning and land use plans.

• Legal status of the land parcel.

• Information on changes to the land record, if any.

Check with the commune or ward-level People’s Committee

The cadastral department of the commune, ward or township People’s Committee generally maintains and updates planning information within its administrative area. This is a useful reference source for local real estate transactions.

Check through local planning information portals

Many provinces and cities have implemented online planning information systems that allow the public to quickly check planning information, land use plans and infrastructure development projects related to a particular area.

Check through land information portals and land databases

In localities where digital data systems have been completed, land users may check information through provincial or municipal land information portals or through the national land database when data has been connected and shared in accordance with regulations.

Engage a professional consultancy or appraisal firm

For high-value transactions or properties involving complex legal issues, engaging an independent consultancy or appraisal firm can help customers assess the planning status, asset utilization potential and possible risks before making an investment or transaction decision.

Should you buy land under planning?

The answer depends on the investment objective.

It may be worth considering if:

• The purchase price is significantly below the market level.

• The planning may increase the value of the surrounding area.

• The investor has a long-term investment strategy.

• Legal risks have been fully assessed.

It may not be advisable if:

• Planning information cannot be verified.

• The asking price is comparable to land not affected by planning.

• There is a high likelihood of land recovery in the short term.

• The investment objective is short term.

One of the most common mistakes is purchasing land based on planning rumors without verifying official information.

How is land under planning valued?

This is an especially important issue for investors, banks and real estate buyers.

Not every parcel of land under planning has the same value.

When conducting an appraisal, appraisers generally consider:

• Type of planning: Transport planning, park planning and residential planning can have completely different impacts.

• Extent of impact: Whether the entire land parcel or only part of the area is affected.

• Planning implementation timeline: Planning expected to be implemented within one year will differ from planning without a defined implementation schedule.

• Liquidity: The actual ability to transfer the property in the market.

• Utilization potential: The ability to build, conduct business or lease the property while waiting for planning implementation.

Why is appraisal necessary for land under planning?

Many transactions fail because buyers and sellers incorrectly assess the value of the asset.

An independent appraisal certificate can help:

• Determine an appropriate market value.

• Assess the impact of planning on land value.

• Support transparent purchases and sales.

• Support bank financing.

• Support dispute resolution.

• Support compensation and resettlement.

For properties affected by planning, determining the correct value is often significantly more complex than valuing ordinary real estate.

Can land under planning be used for a bank loan?

This is a common concern when real estate is used as collateral.

Banks generally consider:

• Legal status.

• Type of planning.

• Likelihood of land recovery.

• Liquidity.

• Market value.

Each bank has its own risk management policies. Certain properties located within transport planning areas, public facility planning areas or areas with a high likelihood of recovery may be subject to a lower lending ratio or may not be accepted as collateral.

Therefore, collateral appraisal plays an important role in the credit approval process.

Appraisal of collateral for bank financing

When receiving mortgage applications involving real estate located within a planning area, credit institutions often require an independent assessment of the asset value.

The appraisal helps:

• Determine the actual collateral value.

• Assess the ability to dispose of the asset if risks arise.

• Determine an appropriate lending ratio.

• Reduce the risk of non-performing loans.

For customers, an accurate appraisal result may help optimize the credit limit and improve the likelihood of loan approval.

Compensation when the State recovers land under planning

When the State recovers land to implement a project under an approved plan, land users may be considered for compensation if they satisfy the conditions prescribed by law.

The compensation amount is determined in accordance with the Land Law and applicable implementing regulations based on the type of land, current land use status, eligibility for compensation and the specific land price determined by the competent authority at the time of recovery.

In addition to land compensation, land users may also be considered for support relating to:

• Resettlement.

• Stabilization of living conditions.

• Occupational transition.

• Relocation expenses.

Objectively determining asset value is an important basis for protecting the legitimate interests of land users.

Common risks when buying land under planning

• Buying based on rumors: Planning rumors can cause land prices to increase sharply without reflecting actual value.

• Failing to check legal documents: Many buyers review only the Land Use Rights Certificate without verifying planning information.

• Subjective valuation: Failing to assess the actual impact of planning on the asset.

• Difficulty obtaining bank financing: Certain types of land under planning may have a reduced collateral value.

• Low liquidity: The property may be difficult to resell in the short term.

When should you engage a land appraisal firm for land under planning?

Customers should consider using an independent appraisal service when:

• Preparing to purchase land with planning information.

• Transferring high-value real estate.

• Obtaining bank financing using land use rights as collateral.

• Contributing real estate as capital.

• Resolving asset disputes.

• Handling compensation and site clearance.

• Investing in land plots, project land or future development properties.

The cost of an appraisal is generally much lower than the potential financial risk arising from incorrectly assessing asset value.

Land under planning appraisal at Hoang Quan Appraisal

One of the greatest risks when buying or selling land under planning is failing to determine the actual value of the asset. In practice, some buyers pay significantly more than the market value while some owners receive a lower-than-expected valuation from banks when using the property as collateral.

For land affected by planning, asset value depends not only on location and area but also on the type of planning, extent of impact, planning implementation timeline and the actual utilization potential of the property.

Many customers only discover that their land is located within a planning area after paying a deposit or preparing to sign a transfer agreement. Obtaining an independent appraisal before the transaction helps determine the appropriate asset value, assess the impact of planning and reduce potential financial risks.

Hoang Quan Appraisal provides appraisal services for land under planning to help customers:

• Determine an objective market value before buying or selling.

• Assess the impact of planning on asset value.

• Establish a basis for effective price negotiations with buyers or sellers.

• Support bank loan applications using land use rights as collateral.

• Determine values for compensation, site clearance and resettlement.

• Reduce risks when investing in or acquiring land under planning.

With a regularly updated real estate market database and a team of appraisers with practical experience, Hoang Quan Appraisal supports customers in making decisions based on the actual value of the asset rather than subjective judgment or unverified information.

Conclusion

Land under planning is not always a high-risk asset or an asset that cannot be traded. In many cases, it may also present an investment opportunity if the buyer clearly understands the planning information and correctly determines the asset value.

However, before deciding to buy, sell, mortgage or invest, land users should carefully verify the planning status, assess the utilization potential and determine the market value of the property. For high-value transactions or properties located in areas with complex planning factors, using the land appraisal, real estate appraisal and collateral appraisal services for bank financing provided by Hoang Quan Appraisal can help reduce risks, protect legitimate interests and support more informed decisions.