HoREA proposes regulating land plot transactions outside formal projects

The Ho Chi Minh City Real Estate Association (HoREA) has proposed expanding the scope of the Law on Real Estate Business to include land plot transactions occurring outside of formal projects. Currently, a regulatory gap allows individuals or entities to exploit land subdivision and merger rules to act as developers under the guise of private citizens. This practice, often referred to as ‘subdividing and selling plots,’ bypasses formal project requirements and poses significant legal, infrastructural, and financial risks to buyers.

Legal experts note that while bringing these transactions under regulatory oversight could offer four primary benefits—better buyer protection, increased market transparency, improved identification of disguised commercial activities, and clearer tax and transaction data—it also presents challenges. Specifically, there are risks regarding the precise legal definition of ‘land plots’ and the potential for misidentifying legitimate private land sales as commercial business activities.