From January 1, 2025: What are the regulations on payment for sale and purchase of off-plan housing in Vietnam?
What are the regulations on payment for sale and purchase of off-plan housing in Vietnam?
The Law on Real Estate 2023 clearly stipulates that payment for sale and purchase of off-plan housing or building or its floor area will be made in several times. The initial payment, including deposit, shall not exceed 30% of the contract price (while currently the Law on Real Estate Trading 2014 only stipulates that the initial payment must not exceed 30% of the contract price).
Specifically, Article 25 of the Law on Real Estate 2023 stipulates the payment for sale and purchase or lease purchase of off-plan housing or buildings as follows:
- Payment for sale and purchase of off-plan housing or building or its floor area will be made in several times. The initial payment, including deposit, shall not exceed 30% of the contract price, and subsequent payments will be paid according to the construction schedule provided that total amount of such payments made before handover of the housing or building or its floor area to the buyer will not exceed 70% of the contract price. This amount will not exceed 50% of the contract price if the seller is a foreign-invested business organization as prescribed in clause 4 Article 10 of the Law on Real Estate 2023.
- Payment for lease purchase of off-plan housing or building or its floor area will be made in several times. The initial payment, including deposit, shall not exceed 30% of the contract price, and subsequent payments will be paid according to the construction schedule until the housing or building or its floor area is handed over to the tenant-buyer, provided that total amount of such payments made to the landlord before handover will not exceed 50% of the contract price. The remaining amount shall be considered as rent expense which will be paid to the landlord within a specific period of time as agreed upon in the signed contract.
- Total amount of payments made to the seller or landlord before a certificate of LURs and ownership of property on land is issued to the buyer or tenant-buyer as prescribed by the Land Law shall not exceed 95% of the contract price. The remaining amount shall be paid when such certificate is issued to the buyer or tenant-buyer by a competent authority in accordance with regulations of the Land Law.
Meanwhile, the current Law on Real Estate Trading 2014 stipulates that the off-plan real estate sale or lease purchase shall be paid by installments, the initial installment do not exceed 30% of the agreement value, the next installments shall be conformable with real estate construction progress provided that total installment does not exceed 70% of the agreement value if the building has been not transferred to clients; if the seller or the lessor is a foreign-invested enterprise, the total installment does not exceed 50% of the agreement value.
If the buyer or the lessee has been not granted the Certificate of land, ownership of land and property on land, the seller or the lessor shall not collect payment not exceeding 95% of the agreement value from the buyer or the lessee; the remaining value shall be paid when the buyer or the lessee is granted the Certificate of land, ownership of land and property on land by competent agencies.
From January 1, 2025: What are the regulations on payment for sale and purchase of off-plan housing in Vietnam? (Image from the Internet)
What are the prohibited acts in real estate trading in Vietnam under the new Law?
Pursuant to Article 8 of the Law on Real Estate 2023, prohibited acts in real estate trading include:
- Put the real estate that does not meet the conditions set forth in this Law on the market.
- Forge documents or deliberately falsify information on the real estate or the real estate project to be put on the market.
- Fail to disclose information on the real estate or the real estate project to be put on the market as prescribed in this Law.
- Commit fraudulent or deceitful acts in real estate business.
- Receive payment for sale or lease purchase of off-plan housing, off-plan buildings or their floor areas against the provisions of this Law; use money received from buyers or tenant-buyers of off-plan housing, off-plan buildings or their floor areas against regulations of law.
- Partially fulfill or fail to fulfill financial obligations to the State.
- Issue or use practicing certificates for real estate brokers against the provisions of this Law.
- Collect, manage or use charges, fees and other amounts related to real estate business against regulations of law.
When will the regulations on payment for sale and purchase of off-plan housing in Vietnam come into force?
Pursuant to the provisions of Article 82 of the Law on Real Estate 2023, it clearly states:
Effect
1. This Law comes into force from January 01, 2025.
2. The Law on Real Estate Business No. 66/2014/QH13, as amended by the Law No. 61/2020/QH14, (hereinafter referred to as “Law No. 66/2014/QH13”) ceases to have effect from the date of entry into force of this Law, except the provisions of clauses 2, 3, 5, 6, 7, 9, 12 and 13 Article 83 of this Law.
Thus, the Law on Real Estate 2023 comes into force from January 1, 2025.
Accordingly, regulations on payment for sale and purchase of off-plan housing also officially apply from January 1, 2025.
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