The notable changes in the 2023 Real Estate Business Law, which comes into effect on August 1, 2024, replacing the 2014 Law, are outlined below.
Once in force, the 2023 Law will bring about a series of innovations in real estate transactions.
One of the key new provisions is the requirement for home purchases to be made via bank transfer, and for the contract price to reflect the actual price paid.
Home purchases must be made via bank transfer
Article 48 of the 2023 Real Estate Business Law stipulates the following regarding payments in real estate transactions and projects:
Payments for real estate transactions and projects shall be agreed upon by the parties in the contract and shall comply with the law.
From August 1, home purchases must be made via bank transfer. Photo: Nam Khanh |
Project owners, real estate businesses, and real estate service companies must receive payments from customers through domestic credit institutions or foreign bank branches legally operating in Vietnam.
Penalties and compensation for damages due to late payment by the buyer, transferee, lessee, or lessee-buyer, or late handover by the seller, transferor, lessor, or lessor-seller shall be agreed upon by the parties and stipulated in the contract.
Previously, the 2014 Real Estate Business Law stipulated that payments for real estate transactions shall be agreed upon by the parties in the contract and shall comply with the law.
Penalties and compensation for damages due to late payment or late handover shall be agreed upon by the parties and clearly stipulated in the contract.
As per the new regulations, project owners, real estate businesses, and real estate service companies must receive payments through their accounts.
Contract price must reflect the actual price
Article 47 of the 2023 Real Estate Business Law stipulates the following regarding transactions in real estate business:
The selling, transferring, leasing, and lease-purchasing prices of real estate and projects are determined by the parties and stated in the contract. In case the State has regulations on prices, the parties must comply with those regulations.
Organizations and individuals doing business in real estate must record the actual transaction price in the contract and are responsible for any inaccuracies.
In reality, the actual transaction price and the price stated in the contract are often different. The contract price is usually lower and follows the state’s calculation method to reduce personal income tax and registration fees payable by the parties.
Hanh Nguyen
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