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Restrictions proposed on real estate transactions

The Saigon Times

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HCMC – The Ministry of Construction has proposed new regulations limiting the number of real estate transactions individuals can undertake within a year.

According to a draft Government decree circulating for feedback until April 27, individuals would be permitted to sell or lease only three to five landed houses or apartments annually. Beyond this limit, they would be obligated to establish a business for real estate trading.

These proposed measures are outlined in the draft decree aimed at guiding the implementation of several articles of the 2023 Law on Real Estate Business, set to take effect on January 1 next year. Under this law, individuals involved in small-scale real estate activities are exempt from establishing a business but must comply with tax regulations.

To define criteria for identifying individuals engaged in small-scale real estate business, the ministry presents three options in the draft decree. The first option restricts the number of properties—both ready and off-plan—that individuals can transfer or lease within a 12-month period to three to five.

The second option categorizes individuals engaged in small-scale real estate business based on property size, considering urban areas with properties ranging from 1,000 to 2,000 sq.m and rural areas with properties from 3,000 to 5,000 sq.m.

The third option identifies individuals involved in small-scale real estate business as those constructing separate houses with two floors and more and possessing fewer than 20 apartments.

These proposed regulations may pose challenges for short-term real estate investors by limiting property transactions, according to property brokers. Such investors would be required to establish a business, subject to rigorous requirements for conducting real estate investments.

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