Land encroachment and illegal occupation form the most heavily penalised and most common group of administrative land violations — from households building a few square metres over a boundary to enterprises occupying hectares of public land to expand factories. Decree 123/2024/ND-CP raised fine levels and narrowed the minimum punishable area compared with Decree 91/2019/ND-CP, signalling tighter land discipline.
Latest fine levels under Article 8 of Decree 123/2024
Article 8 of Decree 123/2024/ND-CP (effective 04/10/2024, replacing Decree 91/2019/ND-CP and Article 1 of Decree 04/2022/ND-CP; amended by Decree 281/2026/ND-CP) sets brackets by encroached or occupied area. For State-managed land (reflected in cadastral records) in commune areas: fines from VND 3 million (under 0.02 ha) to VND 200 million (02 ha and above), across tiers 0.02–0.05 ha; 0.05–under 0.1 ha; 0.1–under 0.5 ha; 0.5–under 01 ha; 01–under 02 ha. In ward/town areas: double the corresponding level, capped at VND 500 million for individuals and VND 1 billion for organisations. Under Clause 2, Article 5, organisational fines are always double individual fines — FDI enterprises therefore always face the top of each tier. Notable change: the minimum punishable area shrank from 0.05 ha to under 0.02 ha, so even small encroachments are penalised.
Are fines based on area or land value?
Article 8 brackets are based on the area encroached or occupied, not land value. But land value is not entirely irrelevant: unlawful gains from the violation (rent collected on encroached land, harvest value from occupied land) are subject to full disgorgement as a remedial measure — calculated on actual realised value. Additionally, encroachment may trigger criminal liability where criminal elements are met (e.g., land-use violations causing serious consequences), where land value and consequences determine the offence and sentencing frame.
Beyond fines: mandatory land return and restoration
Remedial measures under Clause 8, Article 8 include: (a) restoring the land to its pre-violation state — including plot boundaries and markers (demolishing encroaching structures, fences); (b) disgorging all unlawful gains. The only exception from restoration: violators eligible for a land certificate or permitted temporary use until State recovery under Article 139 of the 2024 Land Law. On “accidental boundary overbuilding” — the answer is yes, it is penalised: land administrative penalties do not exempt negligent encroachment; “not knowing the boundary” is no defence, though it may be weighed when setting the fine within the bracket.
Frequently asked questions
1. What are the latest fines for land encroachment and occupation?
Under Article 8 of Decree 123/2024 (amended by Decree 281/2026): VND 3–200 million by area in communes; doubled in wards/towns, up to VND 500 million (individuals) and VND 1 billion (organisations). The minimum punishable area is now under 0.02 ha.
2. Are fines based on area or land value?
On the encroached or occupied area. But unlawful gains (valued at actual amounts) must be fully disgorged; land value also matters for criminal thresholds.
3. Beyond fines, must the land be returned?
Yes. Remedial measures order restoration of the original state (demolishing encroachments, restoring boundaries and markers) and disgorgement — effectively returning the land to its lawful holder or the State.
4. Is accidental encroachment (overbuilding a boundary) penalised?
Yes. Negligence does not exempt administrative land penalties; “not knowing the boundary” may only be weighed when fixing the fine within the bracket.
Key takeaways for investors
- Article 8, Decree 123/2024: VND 3–200 million (communes) across six area tiers; doubled in wards/towns; up to VND 1 billion for organisations.
- Minimum punishable area lowered to under 0.02 ha — small encroachments are penalised too.
- Fines scale with area; unlawful gains (by value) are fully disgorged.
- Mandatory restoration and land return; negligence is no exemption.
This article has been quality-reviewed by the FLAW AI Legal Council. Content is for legal reference only and does not replace lawyer advice for specific cases.
