Vietnam's proposed revision of the Law on Real Estate Business would introduce a range of new rules aimed at making the property market more transparent and digitally connected, although developers warn that some provisions could increase project costs and eventually raise home prices.

The draft legislation was discussed at a consultation workshop organized by the Vietnam Association of Realtors (VARS) on August 6.

According to Nguyen Van Khoi, Chairman of the Vietnam Real Estate Association, the revised law should align with Resolution No. 21-NQ/TW, which calls for a modern legal framework governing land and real estate.

He said the law should move beyond regulating business activities to creating a transparent and efficient property market, reducing administrative procedures, strengthening post-transaction oversight and improving the use of land resources.

Digital property IDs and streamlined procedures

Speaking at the workshop, Hoang Thu Hang, Deputy Director General of the Department of Housing and Real Estate Market Management under the Ministry of Construction, said the draft had undergone multiple rounds of consultation and is expected to be submitted to the National Assembly for its first reading this month before final approval in October.

The revised draft has been reduced to 10 chapters and 61 articles, compared with 83 articles in the 2023 law, focusing on decentralization, administrative reform, resolving practical obstacles and accelerating digital transformation.

Among the key proposals, authority to approve transfers of all or part of real estate projects would shift from the Prime Minister to provincial governments.

The draft also proposes cutting 9 of 31 business conditions, removing 5 of 12 administrative procedures, simplifying seven others and reducing total processing times by 118 days, from 192 days currently.

One of the most notable changes would require every property to receive a unique identification code within the national housing and real estate information system before it can be traded.

The identification code would remain with the property throughout its lifecycle and serve as its sole nationwide digital identifier.

Other proposed changes include expanding the range of transferable real estate contracts, allowing transfers of completed buildings that have not yet received ownership certificates under the legal framework for future property, and permitting local public housing funds to conduct real estate business without establishing separate companies.

The draft retains the current payment schedule, under which developers cannot collect more than 95% of a property's value before ownership certificates are issued.

The remaining 5% would be placed in a guaranteed account and released only after the buyer receives the ownership certificate.

The proposal also allows mortgaged projects to be transferred with the consent of the mortgagee while clarifying financial obligations related to build-transfer (BT) projects.

Developers seek changes

While welcoming many of the revisions, developers urged lawmakers to reconsider several provisions.

Representatives of Sun Group proposed removing the requirement for authorities to confirm that commercial buildings or floor areas are eligible for sale before transactions can proceed, arguing that the current law does not require such procedures and that no significant regulatory issues have emerged.

The company also called for greater flexibility regarding financial obligations during project transfers, suggesting that outstanding obligations should be transferable to the acquiring party rather than serving as a mandatory precondition.

Meanwhile, Viglacera Corporation asked lawmakers to clarify rules prohibiting companies from authorizing third parties to sign deposit or property sale contracts, saying exceptions should be made for subsidiaries or branches within the same corporate group.

The company also proposed retaining the existing provision that allows developers to proceed with sales if provincial authorities fail to respond within 15 days regarding whether a project is eligible for sale.

A major concern for developers is the draft's proposed requirement that banks provide formal guarantees before developers can sell or lease-purchase off-plan housing.

Under the current law, developers need only obtain approval in principle for such guarantees.

Viglacera argued that mandatory guarantees would increase financing costs, which would ultimately be passed on to homebuyers through higher prices.

Representatives of Phuc Hung Holdings also called for clearer timelines for issuing property identification codes, warning that delays could disrupt transactions, particularly project transfers involving both completed and off-plan developments.

Nguyen Le