2023 AMENDED REAL
ESTATE BUSINESS LAW IN
VIETNAM
Key Points
and Market
Implications
Introduction
Unveiling the Implications:
The 2023 Amended Real
Estate Business Law and its
Impact on the Vietnamese
Real Estate Market.
The conclusion of 2023 &
the beginning of 2024
marked a pivotal moment for
01 02 03
the Vietnamese real estate Amended Law on Amended Housing Law Amended Land Law
market. The National Assem- Real Estate Business (passed 27 November 2023, (passed 18 January 2024,
bly consecutively approved (passed 28 November 2023, effective from 01 January 2025) effective from 01 January 2025)
significant laws, including: effective from 01 January 2025)
These legal frameworks hold immense importance in various aspects, encompassing politics, socio-economics, national defence, security, and environmental sustainability.
As the global leader in commercial real estate services and investments, CBRE, in collaboration with DIMAC Law Firm, proudly presents a series of market commentaries.
These insightful pieces delve into the implications and impact of these laws on the real estate market.
Commencing this series is a comprehensive analysis of the 2023 Amended Real Estate Business Law, shedding light on its far-reaching effects.
2023 Real Estate On 28 November 2023, at the 6th session of the 15th National Assembly of the Socialist Republic of Vietnam, the Law on Real Estate
Business 2023 ("LREB 2023") was passed (with a ratio of 94.13 National Assembly deputies approving). This Law will take e˜ect as
Business Law: from 01 January 2025, replaces the Law on Real Estate Business 2014 (“LREB 2014”) and features with some notable new points as
follows:
Market Implications
01 02 03
Scope of Foreign invested Deposits in houses and construction
regulation economic organization projects formed in the future
Article 1 Article 10.4 & Article 10.5 Article 23
The new Law has narrowed the scope of regulation LREB 2023 amends and clarifies the regulations on LREB 2023 adds new regulation that real estate project investors are
compared to LREB 2014. These changes address the foreign-invested economic organizations, which only allowed to collect a deposit of not exceeding 5% of the
overlapping scope of regulation with other important are not required to carry out investment selling price, lease-purchase price of houses, construction works,
laws such as the Land Law, Housing Law, Law on procedures applicable for foreign investors and construction floor area in construction works from customers
Investment, Law on Management and Use of Public under the provisions of the Law on Investment, when housing and construction projects have satisfied all
Property and other related laws. are allowed to conduct the real estate business as conditions for being put on the market according to the provisions
same as the domestic organizations and of this Law.
With new regulations, LREB 2023 shows a clear and individuals.
independent delineation of the specialized real This is a notable new point that reflects the true nature of the
estate field in relation to other fields related to This amendment helps create favourable deposit while limiting risks for the buyer or hire-purchase party.
investment and land. For example, the transfer conditions and expand the scope of operations However, the deposit regulations do not mention the issue of
of LURs and the transfer of real estate projects as for foreign-invested economic organizations deposit penalties, so the deposit penalty ratio will apply according
collateral for debt recovery will be carried out on specific cases while ensuring consistency to the parties' agreement. To ensure the spirit of the legislator, this
according to the Law on Credit Institutions. with the Law on Investment. regulation also needs to be further guided and applied for a period of
time in practice to evalu-ate its effectiveness.
2023 Real Estate
Business Law:
Market Implications
04 05 06
Conditions for putting houses Guarantees for sale and Land plots –
and construction works formed lease purchase of off-plan Condition for dividing
in the future on the market houses and selling
Article 24.6 Article 26 Article 31
LREB 2023 adds a new regulation that project investors LREB 2023 grants the purchaser the right to choose LREB 2023 adds type II & III urban areas to the subdivision
must complete financial obligations regarding land to the whether or not to require a guarantee of the investor's and land sale prohibition, which tightens the current
State, according to legal regulations for land attached financial obligations. This regulation creates flexible room for regulations on dividing and selling land plots. This tightening
to houses and construction works put on the market. the parties to negotiate freely depending on their actual helps ensure healthy housing market development, landscape
needs but still gives the purchaser the discretion to request and urban development.
The new regulations continue to tighten conditions for real bank guarantees where necessary to protect their legitimate
estate to be put on the market. Previously, requiring rights when signing the contract with the investor. The new regulations also specify procedures for investors to
investors to fulfill their financial obligations was only carry out work to have a basis to proceed with the transfer
impartially implemented according to a policy of each This regulation also aims to simplify paperwork by detailing according to the provisions of law. Specifically, before
locality. However, such an application leads to a lack of the guarantee provision process, enhance the responsibility transferring LURs, the project investor must send a
synchronization and unity among localities and causes of investors in properly implementing regulations, and give notification of qualified LURs to the competent authority.
investor inequality. Therefore, this amendment is beneficial customers a clear basis to ensure their legitimate rights and Within 15 days, the competent authority must answer
to ensure that regulations are applied consistently. interests when dealing with developers. whether or not the conditions for transfer in the form of
dividing lots and selling plots are met.
2023 Real Estate
Business Law:
Market Implications
07 08 09
Conditions for transferring Payment in Real Estate
all/part of a real estate project Real Estate Business Brokerage
Article 40 Article 48 Article 61
Compared with the current laws, LREB 2023 set out an additional LREB 2023 specifically stipulates mandatory Under the new regulations, individuals are allowed to
condition requiring the transferring investor to complete financial conditions applicable to investors and real practice independent brokerage as long as they
obligations regarding land for the project. This regulation tightens the estate enterprises that must receive have a real estate brokerage practice certificate and
transfer conditions of the transferor, prevents the transfer of projects in payments from customers via bank, other cases are registered to pay taxes. However, individuals are
search of profit and is consistent with the principle that the sellers are will be agreed upon by the parties no longer allowed to practice independently but
only allowed to transfer what they have. themselves and are not required via bank. must practice in real estate service businesses.
This also aims to institutionalize the content in This regulation adds standards for independent
This regulation is a filter test for the developers; only developers with good Article 2.6, Section IV of Resolution No. brokers to practice real estate brokerage
financial capabilities can participate in M&A activities. On the other hand, it 18-NQ/TW dated June 16, 2022 on practices, helping to professionalize brokerage
could become a burden for real estate developers in general since delayed strengthening payments via banks, and not activities. At the same time, applying this new
real estate projects are quite common in Vietnam. using cash in real estate transactions. change also helps avoid government tax losses.
Contacts
CBRE VIETNAM RESEARCH DIMAC LAW FIRM
Our unmatched research Dung Duong
Executive Director
Van-Anh Do
Associate Director
Tuan Pham
Managing Partner
delivers actionable insights to An Nguyen
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Yen Nguyen
Manager
Ly Than
Partner
help our clients make informed
[email protected] [email protected] [email protected]business decisions. Thanh Pham Dung Le Dung Le
Associate Director Associate Manager Junior Associate
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