Ministry rescinds proposal to cap individual housing sales, leases at 5 units annually

The ministry had previously recommended adding explanations to clarify a recent amendment to the Real Estate Business Law that says individuals who engage in small-scale real estate activities do not need to establish a business but are required to pay taxes.

It suggested defining individuals who engage in small-scale real estate activities as people who sell or lease up to five houses or apartment units and up to 10 if they are under construction.

This suggestion received negative feedback from many experts, prompting the ministry to take back the proposal.

While the regulation might be able to curb speculation, it can easily be evaded and keeping tabs on how many properties an individual has sold or leased in a year is difficult, experts said.

Pham Thanh Tuan, a member of the Hanoi Bar Association, suggested that the origin of the land should also be considered.

"If an individual’s properties were inherited or gifted by the government, they should be able to freely sell, lease or transfer it regardless of the scale of the activities," he said. "On the other hand, individuals who acquired a large area of land in a short period of time might be required to establish a business."

Tuan noted that implementing such a rule is not easy as it requires collaboration between multiple regulators to keep track of individuals’ real estate transactions.

"If it can be implemented, such a rule would surely prevent individuals from running large-scale real estate activities without setting up a business while maintaining the rights of other property owners," he explained.