State Policy on Real Estate Business Investment under the 2023 Real Estate Business Law: How is it?
State Policy on Real Estate Business Investment According to the 2023 Law on Real Estate Business
Pursuant to Article 7 of the 2023 Law on Real Estate Business, this content is regulated as follows:
State Policy on Real Estate Business Investment
1. The State encourages organizations and individuals from all economic sectors to invest in real estate business in line with the country's socio-economic development goals for each period and region.
2. The State encourages and has preferential policies for organizations and individuals investing in social housing construction and real estate projects receiving investment incentives.
3. The State invests and encourages organizations and individuals to invest in building technical infrastructure facilities outside the project's scope and supports investment in constructing technical infrastructure facilities within the project for real estate projects with investment incentives.
4. The State invests and encourages organizations and individuals to invest in urban public service projects and social infrastructure facilities within the real estate project.
5. The State has policies to regulate the real estate market, ensuring it develops healthily, safely, and sustainably.
6. The State has policies for organizations and individuals to carry out non-cash payments in real estate transactions.
7. The State encourages organizations and individuals to conduct transactions of buying, selling, transferring, leasing, lease-purchasing, and subleasing houses, construction works, and land use rights through real estate exchanges.
From January 1, 2025, the State will implement the above policies to encourage, support, and regulate the real estate market.
State Policy on Real Estate Business Investment According to the 2023 Law on Real Estate Business (Image from Internet)
Conditions for Organizations and Individuals Engaging in Real Estate Business
Pursuant to Article 9 of the 2023 Law on Real Estate Business, it is regulated as follows:
Conditions for Organizations and Individuals Engaging in Real Estate Business
1. Organizations and individuals engaging in real estate business must establish an enterprise under the provisions of the law on enterprises or establish a cooperative or cooperative union in accordance with the law on cooperatives, having a real estate business sector (collectively referred to as a real estate business enterprise), except as provided in Clauses 3 and 4 of this Article.
In case organizations and individuals engage in real estate service business as specified in Clause 5 of this Article.
2. A real estate business enterprise must meet the following conditions:
a) Not being during the period of being prohibited from real estate business activities, temporarily suspended, or suspended according to the court's verdicts, decisions of competent state authorities;
b) Ensuring the ratio of credit debt, corporate bond debt to owner’s equity;
c) A real estate business enterprise must have owner’s equity not less than 20% of the total investment capital for projects with land use scale under 20 hectares, not less than 15% of the total investment capital for projects with land use scale from 20 hectares or more, and must ensure the ability to mobilize capital to implement the investment project; in case a real estate business enterprise simultaneously implements multiple projects, it must have sufficient owner's equity allocated to ensure the above ratios for each project to implement all projects.
3. Individuals engaging in small-scale real estate business are not required to establish a real estate business enterprise but must declare and pay tax according to the law.
4. Organizations and individuals selling houses, construction works, construction floor areas not for business purposes, or renting, lease-purchasing houses, construction works, construction floor areas on a small scale are not required to comply with the provisions of this Law but must declare and pay tax according to the law; in case individuals sell, lease-purchase houses, construction works, construction floor areas, they must also carry out notarization and certification as specified in Clause 5 of Article 44 of this Law.
5. Organizations and individuals engaging in real estate service business must establish an enterprise under the provisions of the law on enterprises or establish a cooperative or cooperative union as prescribed by the law on cooperatives (collectively referred to as real estate service business enterprise), must meet the conditions stipulated by this Law.
6. The Government of Vietnam specifies in detail Points b and c of Clause 2 of this Article; determines what denotes small-scale real estate business as provided in Clauses 3 and 4 of this Article.
Accordingly, from January 1, 2025, organizations and individuals engaging in the real estate business must comply with the aforementioned provisions.
Requirements for Real Estate Business Projects According to the New Law on Real Estate Business
Pursuant to Article 15 of the 2023 Law on Real Estate Business, the requirements for real estate projects are:
- Real estate projects must align with land use planning and plans.
- Real estate projects must conform to approved planning under construction law and urban planning law.
- The order and procedures for executing real estate projects follow the regulations of laws on: planning, investment, land, construction, housing, and related laws.
- Compliance with construction permits is required when a construction permit is necessary.
- Real estate projects must be constructed according to the approved schedule, planning, design, and within the agreed project implementation period approved by the competent state authority.
- Real estate housing construction projects, in addition to the above provisions, must also meet the requirements stipulated by housing law.
The 2023 Law on Real Estate Business takes effect on January 1, 2025.
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