Global Vietnam Lawyers is pleased to introduce an article by Lawyer Nguyen Thi Hang and Paralegal Le Thi Ngan titled “Small-scale real estate business: Still a legal “grey area”?”. This article was originally published in The Saigon Times, issue No.28-2025 (1.804) on July 10, 2025 and is shared here with permission from the publisher.
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The concept of "small-scale real estate business" was outlined in the Law on Real Estate Business 2014 but there were no regulations on quantitative criteria to determine what is small-scale real estate business (REB). This issue remains controversial under the Law on Real Estate Business 2023, even though the new law has inherited and specifically quantified the concept, which is expected to clarify the boundary between professional REB activities and small-scale civil transactions.
The concept of "small-scale real estate business" remains subject to ongoing controversy due to its divergent interpretations, thereby posing potential legal risks during the application process.
Pursuant to Clause 3, Article 9 of the Law on Real Estate Business 2023, “Individuals engaged in small-scale REB are not required to establish a REB enterprise but must declare and pay taxes pursuant to the law”. Furthermore, Clause 2, Article 7of Decree 96/2024/ND-CP sets out specific quantitative criteria: “Individuals engaged in small-scale REB must meet the following two requirements: (1) Not falling into the category of having to establish an investment project pursuant to the law on construction and housing; (2) Not falling into the category of having a value exceeding VND300 billion per contract and having more than 10 transactions per year. In the case of one transaction per year, the value shall not be taken into account”.
Applying the aforesaid provisions, is an individual who purchases 30 real estate properties with a total transaction value of VND200 billion be considered as conducting small-scale REB and thus be exempted from the requirement to establish a real estate business enterprise? Currently, differing interpretations and practical applications across various localities nationwide have given rise to a number of conflicting opinions, as outlined below:
Is the individual purchaser conducting REB?
Pursuant to Clause 3, Article 1 of the Law on Real Estate Business 2023, REB refers to activities carried out for profit-making purposes through investing capital in creating houses, construction works, land use rights with technical infrastructure in real estate projects for sale, transfer; lease, sublease, lease-purchase of houses, construction works; lease, sublease of land use rights with technical infrastructure in real estate projects; transfer of real estate projects; real estate service business.
According to the above regulations, REB activities mainly focus on the purpose or conduct of "selling", "transferring", "leasing" a real estate. From this perspective, a real estate trading entity is an entity that is creating real estate for sale, or is selling or leasing real estate. In other words, when an individual acts as a purchaser, going ahead with purchasing real estate (even in large quantities and with unknown purposes), that individual is not considered to be doing REB and accordingly they do not have to register to establish an enterprise. This view is supported by a number of notary offices, who opine that where an individual purchases real estate from one or more sellers, the notarization of the sale and purchase contracts may proceed as usual. Reverting to the aforesaid example, an individual purchasing 30 real estates (regardless of value) can stillcarry out such purchasing and there is no problem with notarizing the sales contract.
In contrast to the above viewpoint, a more cautious viewpoint holds that even when an individual merely purchases a large volume of real estate (without having sold or shown any intent to sell), such conduct may already constitute engaging in real estate business. Accordingly, it is necessary to further consider the quantitative criteria to determine whether the purchase of real estate by this individual is considered small-scale REB, and whether it is required to register his/her business to establish an enterprise.
One single word - "and" - gives rise to numerous interpretations.
As presented above, one of the conditions to determine whether an individual is conducting a small-scale REB is that they must not fall into the category of "having a value exceeding VND300 billion per contract AND having more than 10 transactions in a year".
The first understanding holds that: An individual purchasing real estate with each contract not exceeding VND300 billion and not having more than 10 transactions per year is considered small-scale REB-conducting. Thus, an individual who buys 30 real estate properties with a total transaction value of VND200 billion is not considered small-scale REB-conducting because the number of transactions exceeds 10 times/year (purchasing 30 real estate properties). Accordingly, such individual must register to establish a REB enterprise.
The second understanding explains the wording as follows: Not falling into the category of “having a value exceeding VND300 billion per contract and having more than 10 transactions per year". The conditional phrase "a value exceeding VND300 billion per contract and a number of transactions exceeding 10 times/year" is a combined set of criteria. Thus, only when an individual conducts transactions exceeding 10 times/year, and at the same time has at least one real estate contract with a value exceeding VND300 billion, will he/she be deemed to have surpassed the “small-scale” threshold and be required to register for REB. In the remaining cases, such as an individual making 30 transactions/year but no contract exceeds VND300 billion or making transactions less than 10 times/year but the transaction value is over VND300 billion/contract, this individual is still considered not to have exceeded the “small-scale” threshold and does not have to register for REB.
Is each contract or each real property a transaction?
Another pressing question is how to determine what constitutes a “single transaction”. Specifically, if multiple real estate properties are transferred under the same contract, should this be treated as one transaction, or should each transaction of a real estate property be counted as a separate transaction (regardless of whether sold under one contract or multiple separate contracts)?
In practice, some notary offices are adopting a cautious understanding that each real property recorded in a contract constitutes an independent transaction. This understanding leads to a situation where, for example, an individual signing a contract to purchase 30 apartments is still considered to have performed 30 transactions.
In the second draft of Decree 96/2024, released by the Ministry of Construction for public comment on March 5, 2024, there was a specific proposal to limit the number of realproperties that an individual is allowed to sell, transfer, lease, or lease-purchase - accordingly, option 1 in the draft stipulates that individuals conducting small-scale REB transactions are only allowed to transact a maximum of five houses in a year. However, this proposal was eliminated after receiving feedback from the community and experts. The re-regulation using the criterion of "number of transactions" instead of "number of real properties" shows the clear intention of the drafting agency to use the contract as the unit of calculation for transactions, not each individual real property.
Which authority is responsible for overseeing small-scale real estate business activities, and how will such oversight be carried out?
Even if a uniform understanding of the aforementioned issues is achieved, the next critical question is: which authority will be responsible for supervising whether an individual exceeds the “small-scale” threshold in real estate business activities, and at what stage of the transaction cycle, such supervision will be conducted - at the stage of notarization of contracts, tax declaration, or issuance of land use right certificates?
According to Clause 1, Article 3 of the Law on Real Estate Business 2023, the scope of real estate business, whether small-scale or not, also includes the lease and sublease of real estate, etc. However, leasing and sub-leasing transactions are currently not required to notarize contracts[1], this leads to the fact that notary organizations do not have a complete database to track and monitor the number of real estate transactions of individuals in a year. Even for transactions that require notarization, the notarization database under the Law on Notarization 2014 is only deployed individually in each locality and whether there is a nationwide interconnected mechanism to determine the number and value of real estate transactions that an individual conducts throughout Vietnam. This will lead to difficulties in determining which database the notary organization will rely on to assess the overall number and value of transactions to determine the “small scale” threshold when performing notarization procedures for real estate transaction contracts of individuals.
Meanwhile, according to regulations, individuals doing small-scale REB must still declare and pay taxes, accordingly, the tax authority is considered well-positioned to monitor REB activities through tax declaration data. However, in practice, there is a situation where the tax authority assesses that an individual is not a small-scale REB, while the transaction contract has already been notarized and the parties have substantially fulfilled their contractual obligations (for example, payment, handover of assets), the question arises as to how such a notarized contract should be handle in order to avoid disrupting civil transactions while still complying with the law? Similarly, if the land management authority has a different view from the tax authority when considering the issuance of a land use right certificate, what is the coordination mechanism or priority to apply?
In practice, certain localities have opted to implement oversight at the initial stage—when an individual acquires real estate—rather than deferring supervision until the point of sale, lease, or lease-purchase. Although this approach lacks clear regulatory guidance, it may be viewed as a prudent measure intended to prevent the exploitation of legal loopholes to avoid business registration requirements.
In the context that Vietnam has implemented personal identification nationwide, synchronizing real estate transaction data according to personal identification codes can be a feasible solution to support management authorities in determining the number of and value of transactions conducted by an individual, regardless of the location where the transactions are performed. This would lay the foundation for interconnecting data between notary, tax and land registration authorities, thereby ensuring effective and consistent oversight of small-scale REB.
Based on the above analysis, to ensure the consistent implementation of Decree 96/2024, competent authorities should promptly issue detailed guidance to unify the interpretation of conditions for identifying individuals conducting small-scale REB. At the same time, to effectively enforce relevant regulations, it is necessary to urgently complete the database and establish a mechanism to interconnect notarization, tax and land registration procedures to ensure effective and transparent information sharing, avoid evasion of business registration obligations of related entities.
[1] Article 27.3 of the Land Law 2024