Nhung Nguyen, partner at Vilasia Law Firm

Yet practice tells a more complicated story. While the intent of lawmakers has been to streamline procedures, businesses and investors are still encountering obstacles. Some arise from inconsistencies between the new laws themselves, while others come from diverging interpretations by provincial authorities. These gaps are proving particularly acute in the area of ​​real estate project transfers, which remain a vital channel for capital circulation and project restructuring.

Transfers without land use rights remain difficult

The most significant innovation of the Real Estate Business Law 2023 is that it allows developers to transfer projects immediately after fulfilling land-related financial obligations, even if they have yet to receive a land use right certificate.

This was seen as a breakthrough. In practice, once financial obligations are settled, investors often still wait months before the certificate is issued. The new rule was expected to cut that waiting time, easing both buy-side and sell-side transactions and accelerating project timelines.

To implement this reform, the government issued Decree 101 of 2024, which provides detailed procedures for registration of land and assets attached to land. Article 43 of the decree distinguishes clearly between two situations: where the transferor has already been granted the certificate, and where the certificate has not yet been issued. In the latter case, the dossier requires only proof of completed financial obligations by both parties, together with the land allocation or lease decision.

Provinces have moved to embed this into their own administrative systems. In Hanoi, for example, the People's Committee has issued decisions setting out the documentation required for project transfers without a certificate.

On paper, the reform is straightforward. In practice, however, land administration agencies remain hesitant. Many continue to hold back approvals until certificates are issued, arguing that under the Land Law 2024 the transfer of land use rights or assets attached to land cannot proceed without the certificate.

Here lies a legal clash. The Land Law regulates transactions in land use rights, whereas the Real Estate Business Law regulates transactions in real estate projects. Applying the Land Law rigidly to project transfers undermines the very reform the Real Estate Business Law was meant to deliver.

The result is that a well-intended streamlining measure is stalling at the point of execution. Instead of faster deals, investors are still bogged down in paperwork.

Unclear timing of tax obligations

Another issue has emerged around the timing of tax obligations.

Under the previous regime, whenever a project on leased land with annual rental payments was transferred, the state would first revoke the land from the seller and then re-lease it to the buyer. The date of that re-lease decision marks the start of the buyer's financial obligations and served as a clean cut-off point between seller and buyer.

The new framework changes this. Decree 101 no longer makes a distinction between annual and one-off rental payments when the buyer is a domestic enterprise. In such cases, there is no longer a re-lease decision, and therefore no clear legal cut-off point.

Faced with this gap, many local authorities have chosen the date of the decision approving the project transfer as the moment the buyer becomes liable. This has led to an awkward scenario: as soon as the approval decision is issued, the buyer must file and pay land-related taxes within 30 days, even if the transfer contract has not been signed, the purchase price not paid, and the project not handed over.

Meanwhile, the Real Estate Business Law gives the parties up to 60 days after transfer approval to complete those very steps. As a result, some buyers find themselves facing tax deadlines before they even gain control of the project. Miss the 30-day filing requirement, and penalties quickly follow.

Ironically, this problem does not arise for foreign-invested enterprises. Their transfers still trigger a formal revocation and re-lease process, preserving the traditional legal cut-off. Domestic companies, however, supposedly the main beneficiaries of reform, are the ones left carrying this burden.

VAT policy becomes burdensome for investors

The 10 per cent VAT surcharge has emerged as a major concern for many investors, particularly buyers.

In early 2025, the General Department of Taxation issued an official letter confirming that the transfer of part of a project, such as industrial infrastructure or residential developments, should be treated as a real estate business activity and therefore subject to 10 per cent VAT.

This represents a reversal. Back in 2015, the same authority had issued guidance reassuring investors that funds of investment projects, including real estate, undertook for VAT-able business purposes were exempt from VAT declarations and payments.

The governing regulations had not changed, yet the abrupt shift in interpretation created uncertainty for both investors and tax officials.

By July 2025, when the new VAT Law and its implementing regulations came into effect, the position became clearer but more onerous. The exemption from VAT declarations and payments was abolished, project transfers were no longer excluded, and capital transfers (which are not subject to VAT) were clearly defined to exclude “project transfers” and “asset transfers”. In effect, all real estate project transfers are now subject to VAT.

In practice, project transfers are often used as a necessary solution to ease financial bottlenecks rather than as a discretionary choice by investors. The new VAT rules impose significant additional costs, risk constraining supply, and may prompt investors to restructure deals, for example by shifting to capital transfers to avoid VAT.

Three priorities for reform

The picture that emerges is not one of weak laws, but of laws pulling in different directions, and of practice lagging behind principles. How to move forward? Three priorities stand out.

First, clarify the hierarchy between laws. The Real Estate Business Law was designed to govern project transfers, and its intent should prevail. A unified circular or joint guidance from the Ministry of Construction and the Ministry of Natural Resources and Environment could settle this, giving local officials confidence to act consistently.

Second, set a clear legal trigger for tax obligations. For projects on annual leasehold land, the law should specify that the buyer's obligations start either from the effective date of the transfer contract or from the date the land registration change is completed, not from the approval administrative decision. This would align obligations with actual control of the project.

Third, adjust the VAT policy to apply a 0 per cent rate to project transfers. This would reduce financial pressure on investors, enhance liquidity in the market, and help address the current shortage of real estate supply.

Conclusion

The past year has shown that Vietnam's new land and real estate laws provide a modern and more transparent framework for the sector. But implementation gaps, from certificate requirements to the timing of tax liabilities and VAT policy, are slowing the market's ability to reap those benefits.

Policy reform is only as effective as its execution. Unless local authorities apply the law with consistency and flexibility, investors will continue to face avoidable friction.

Ultimately, the goal of lawmakers is clear: to make project transfers a straightforward channel for capital mobilisation and market restructuring. To achieve it, what is needed now is not more laws, but practical alignment, coherent tax rules, and a more open mindset in enforcement.

If those steps are taken, Vietnam's real estate market will gain the liquidity and confidence it needs to support sustainable growth.