The Vietnamese version is available here.

One year after the Land Law 2024, the Real Estate Business Law 2023, and the Housing Law 2023 came into effect, Vietnam’s real estate legal framework has begun to show both its reform momentum and the challenges of implementation.

Vilasia, in collaboration with The Saigon Times, is pleased to present a series of analytical articles by Vilasia’s Nhung Nguyen, offering a one-year review of how these landmark laws are being implemented in practice. Through real cases and regulatory analysis, the series highlights key issues emerging in areas such as land financial obligations, project transfers, delayed projects, commercial housing development, and project implementation models. The series will aim to provide practitioners, investors, and policymakers with a clearer picture of where the new legal framework is working as intended and where further clarification and adjustment may be needed.

The series focus on five main topics:

(i) Land-Related Financial Obligations: The Strain of Balancing Interests;
(ii) Transfers of Real Estate Projects: Practical Bottlenecks in Implementation;
(iii) Delayed (“Suspended”) Projects: Responsibility Cannot Be Placed Solely on Investors;
(iv) Development and Management of Commercial Housing: Bright Spots and Persistent Bottlenecks; and
(v) Apartment Building Governance: Maintenance Funds Remain a “Hot Spot”.

Below is the forth in the series entitled “Development and Management of Commercial Housing: Bright Spots and Persistent Bottlenecks”, originally published in Vietnamese in The Saigon Times on August 30, 2025. The digital version is available here.

Development and Management of Commercial Housing Bright Spots and Persistent Bottlenecks

By Lawyer Nguyễn Thị Nhung (*)

(The Saigon Times) – LTS: After one year in  effect, the new laws, including the Land Law 2024, the Real Estate Business Law 2023, and the Housing Law 2023 have gradually come into practice.

However, reality still reveals many emerging obstacles, stemming from both inconsistent regulations and divergent interpretations and applications among regulatory authorities. The Saigon Times presents a series of articles analyzing key issues in the implementation of these legal documents.

Land Fund Policy: Opening the Way for Commercial Housing

On November 30, 2024, the National Assembly passed Resolution 171/2024/QH15 regarding the pilot implementation of commercial housing projects through agreements on receiving land use rights or for land where usage rights are currently held (Resolution 171).

This policy applies nationwide and is not limited to major urban centers, enabling all localities to proactively implement it according to demand. All projects eligible to receive land use rights may participate in the pilot, regardless of whether the land use rights were acquired (or are currently held) before or after Resolution 171 took effect. Furthermore, most land categories specified in Article 9 of the Land Law 2024 are eligible for the transfer of land use rights or the change of land-use purpose to implement commercial housing projects[1].

Immediately after Resolution 171 was issued, the Government promulgated Decree 175/2025/ND-CP on April 1, 2025, detailing the implementation of this pilot mechanism (Decree 175).

The issuance of Resolution 171 and Decree 175 is considered a policy breakthrough, particularly in the context of increasingly scarce land funds in major cities. In reality, the implementation process has proceeded even faster than the speed of policy formulation. Just 37 days after Decree 175 was issued, on May 7, 2025, the Hanoi People’s Committee announced the list of pilot land plots and issued the Approval Notice, marking the completion of procedures for phase 1 with 148 land plots[2]. By July, the list of 150 land plots eligible to participate in phase 2 was also issued[3].

However, a notable point is that neither Resolution 171 nor Decree 175 clearly specifies how to determine the residential land area in each pilot project, which serves as the basis for calculating the total area of all pilot projects to ensure it does not exceed the 30% cap on additional residential land within the approved planning period[4].

This lack of clarity caused confusion in implementation, specifically requiring the Hanoi People’s Committee to send an official dispatch to the (former) Ministry of Natural Resources and Environment requesting guidance. In its written response, the Department of Land Management under the (former) Ministry of Natural Resources and Environment guided that the locality could choose to: (i) refer to relevant regulations on housing project implementation if there are stipulations on the required residential land ratio; or (ii) base the calculation on the actual situation of approved local housing projects (those with 1/500 detailed construction planning or allocated land) to determine the average residential land ratio and apply it uniformly[5]. The absence of a unified determination criterion in both legal documents and guidance from central management agencies may lead to a situation where each locality applies different interpretations and calculation methods. This causes inconsistency in implementation and becomes a barrier to the effective deployment of the pilot policy.

These shortcomings will no longer be a concern when the draft Law amending the Land Law 2024 is passed. Specifically, according to the draft Law amending the Land Law 2024 updated in mid-August 2025[6], the Ministry of Agriculture and Environment has proposed removing the regulation restricting the types of land eligible for agreement to implement commercial housing projects (currently limited to residential land) at Point b, Clause 1, Article 127. In other words, the open policy in Resolution 171 will be codified, with no limits on implementation duration or the total land area subject to agreement. However, the draft Law amending the Land Law 2024 currently does not propose removing this restriction for cases where investors already hold land use rights.

Foreigners and the issue of owning landed houses

Under the Housing Law 2023, foreign individuals and organizations are allowed to purchase housing in commercial projects, including both apartments and landed houses such as townhouses and villas[7]. Compared to domestic organizations and individuals, their ownership is capped in terms of quantity (no more than 30% of units in an apartment building or 250 landed houses in a ward-level administrative area) and duration (up to 50 years)[8], mainly to ensure national defense and security.

However, reality reveals a paradox: foreigners have only been able to exercise ownership rights over apartments, while the issuance of Certificates of Land Use Rights and Ownership of House for landed houses has been blocked nationwide. As a consequence, there are projects where competent authorities have already approved the list of housing eligible for sale to foreigners (including landed houses) and where developers and foreign buyers have signed valid contracts and paid up to 95% of the property value. Yet, the final step of issuing the “Red Book” to the buyer cannot be completed.

The situation described above is causing serious consequences for both parties to the transaction. For foreign buyers, the failure to receive legal ownership certificates prevents them from exercising basic rights such as transfer or mortgage. For developers, as they cannot complete the procedures to issue the Red Book to buyers, they are unable to collect the final payment, which affects project cash flow. Simultaneously, this situation entails legal risks and easily leads to disputes and complaints between parties, damaging corporate reputation and reducing market stability.

In this context, refining the policy is an urgent requirement. If the State determines to allow the sale of landed houses to foreigners, it must urgently review and rectify administrative procedures,  particularly by providing specific guidance to localities on the process of issuing ownership certificates. Conversely, if the policy standpoint is to disallow foreign ownership of landed houses to ensure national defense and security, the Housing Law 2023 should be amended to exclude this housing type from permissible transactions from the outset. At the same time, reviewing and revoking or adjusting the lists of housing previously approved for sale to foreigners is essential to ensure consistency between legal regulations and enforcement practice.

The Airbnb Model: To Allow or To Ban?

The use of apartment units for improper purposes has long been strictly prohibited by law. According to the Land Law 2024, apartment buildings constructed for residential purposes must not be used for other purposes such as tourist lodging, offices, or business services. This is not a new regulation but has been consistently inherited from the Housing Law 2014 to the Housing Law 2023 (amended). However, reality shows that the supervision and handling of violations regarding apartment functionality remain very lax, leading to a situation where many apartments are still rented out short-term in the form of tourist lodging, typically through platforms like Airbnb.

It is necessary to clearly distinguish: besides standard residential apartments, there are “mixed-use apartment buildings,” which are projects designed and licensed from the outset to combine residential functions with other purposes such as commerce, services, tourism, and offices. In this case, use for other purposes is legal, provided that it complies with the functionality approved by competent authorities during construction investment licensing.

In February 2025, the (former) Ho Chi Minh City People’s Committee issued Decision 26/2025/QD-UBND, officially tightening short-term accommodation business activities in apartment buildings. Accordingly, the city strictly bans Airbnb-like operations in purely residential apartment buildings while imposing numerous conditions on short-term accommodation businesses in mixed-use apartments, such as: requiring registration of corresponding business lines, ensuring fire safety, having independent escape stairs, and organizing professional operational management. This policy immediately received mixed reactions from public opinion: Residents agreed, whereas Airbnb accommodation service investors fiercely opposed it. Many opinions, including that of Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), argued that the Airbnb model needs to be considered a legitimate business line and that appropriate regulations and management mechanisms should be established for this activity[9].

In June 2025, following numerous petitions from associations and enterprises, Ho Chi Minh City instructed relevant departments and agencies to study a pilot scheme for short-term accommodation in certain areas, instead of maintaining the previous blanket ban. By mid-July 2025, the Ho Chi Minh City Department of Construction stated that it was coordinating with other sectors to advise the Ho Chi Minh City People’s Committee to issue a pilot plan for short-term accommodation activities in a number of apartment buildings. The pilot will be selected by area, requiring resident consent, professional operational management, and assurance of fire safety and security and order, with a duration of 12 months[10].

This pilot reflects an adjustment suitable for socio-economic reality, as the demand for short-term accommodation sharing becomes increasingly popular. From a state management perspective, this pilot model will establish an appropriate legal framework to control the situation more effectively than the current status – an absolute ban on paper that lacks the conditions to be enforced in reality!

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(*) Vilasia Law Firm

[1] Read our previous analysis of this policy in the article: “Pilot Mechanism for Commercial Housing Development: An Open and Breakthrough Step,” The Saigon Times, https://thesaigontimes.vn/co-che-thi-diem-de-phat-trien-nha-o-thuong-mai-buoc-di-coi-mo-va-dot-pha/ (last accessed August 3, 2025).

[2] Notice No. 493/TB-UBND dated May 7, 2025, regarding the approval for real estate business organizations to implement pilot projects.

[3] Resolution No.434/NQ-HDND dated July 10, 2025, of the Hanoi City People’s Council.

[4] Point b, Clause 1, Article 4, Resolution 171.

[5] Official Dispatch No.1437/QLDD-CSPC dated July 11, 2025, , of the Department of Land Management – Ministry of Agriculture and Environment.

[6] Official Dispatch No. 5556/BNNMT-QLDD dated August 14, 2025.

[7] Article 17, Housing Law 2023.

[8] Articles 19 and 20, Housing Law 2023.

[9] “Proposal to pilot short-term accommodation model in apartment buildings,” VnExpress, https://vnexpress.net/de-xuat-thi-diem-mo-hinh-luu-tru-ngan-ngay-trong-chung-cu-4866121.html (last accessed August 3, 2025).

[10] “HCMC plans to pilot short-term accommodation rental in apartment buildings,” VnExpress, https://vnexpress.net/tp-hcm-du-kien-thi-diem-cho-thue-luu-tru-ngan-han-tai-chung-cu-4915466.html (last accessed August 3, 2025).