Small-scale real estate individuals may only sell, transfer, lease, rent-purchase available homes, homes formed in the future with a fixed limit
At the 6th session of the 15th National Assembly, the Real Estate Business Law with 10 Chapters and 83 Articles (Real Estate Business Law 2023) was passed and will take effect from January 1, 2025.
Implementing the assigned tasks of the Government, the Ministry of Construction is drafting a Decree detailing the implementation of some provisions of the Real Estate Business Law 2023 to replace Decree No. 02/2022/ND-CP of the Government.
The draft Decree will be open for comments until April 27, including 7 Chapters and 38 Articles. Specifically, it regulates business in available real estate and business in real estate formed in the future; procedures for transferring real estate projects; real estate business contracts; real estate service business; real estate market regulation.
Real Estate Business Law 2023 stipulates that small-scale real estate individuals do not need to establish real estate businesses, but must declare and pay taxes according to the law. Therefore, the draft decree aims to quantify and establish criteria for “small-scale real estate individuals”.
Notably, in Clause 1, Article 7, the Ministry of Construction specifies the conditions for small-scale real estate individuals and for organizations and individuals selling houses, construction works, floor areas in construction works not for business purposes. This is a very new provision compared to the current provision in Decree No. 02/2022/ND-CP.
Conditions for small-scale real estate business
In the draft decree, the Ministry of Construction presents 3 options.
Option 1: Individuals who sell, transfer, lease, rent-purchase available homes, homes formed in the future from 3 to 5 homes or from 3 to 5 apartments, within 1 year (12 months). Individuals who sell, transfer, lease, rent-purchase available construction works, construction works formed in the future from 5 to 10 construction works or from 5 to 10 floor areas in construction works, within 1 year (12 months).
Option 2: Sell, transfer, lease, rent-purchase real estate under ownership, use rights as prescribed by law with an area from 1,000m2 to 2,000m2 of land in urban areas or from 3,000m2 to 5,000m2 of land in rural areas; from 1,000m2 to 2,000m2 of floor area for houses, mixed-use construction works or from 3,000m2 to 5,000m2 of floor area for non-residential construction works.
Option 3: Individuals who invest in building separate housing from 2 floors or more and with a scale of less than 20 apartments for lease as regulated in Item 3, Article 57 of the Housing Law No. 27/2023/QH15.
Individuals who sell, lease-purchase homes, construction works originating from inherited homes, construction works received.
Individuals who sell, lease-purchase homes originating from charity homes, affectionate homes, houses of solidarity that individuals are given by state agencies, organizations, individuals…
According to the current provision in Article 5, Decree No. 02/2022/ND-CP, organizations, households, individuals selling, transferring, leasing, rent-purchasing small-scale real estate are not required to establish enterprises. However, Decree No. 02/2022/ND-CP did not provide specific criteria on the number of real estate transactions allowed for this group of subjects.
With the ongoing draft, the Ministry of Construction has specifically regulated the number of real estate transactions, available homes, homes formed in the future, construction works; sale, transfer, lease, rent-purchase real estate; construction of apartments for rent… for small-scale real estate individuals.
