On the Ministry of Construction's Information Portal, reader L.N wondered:
According to Article 7 of Decree No. 96/2024/ND-CP guiding the Law on Real Estate Business:
“1. Individuals doing small-scale real estate business must meet the following requirements:
a) Not falling into the case of having to prepare an investment project according to the provisions of law on construction and housing;
b) Not falling into the case of a value exceeding 300 billion VND per contract and having more than 10 transactions in a year. In case of 1 transaction in a year, the value is not calculated.
Accordingly, small-scale real estate businesses must meet the following two requirements:
(1) Not subject to the case of having to prepare an investment project according to the provisions of law on construction and housing;
(2) Not falling into the case of a value exceeding 300 billion VND per contract and having more than 10 transactions in a year. In case of a transaction once a year, the value is not calculated. Applying the above regulations, is it considered that an individual selling 30 real estate properties with each contract worth 6 billion VND is doing small-scale real estate business so as not to have to establish a real estate business enterprise?
Answering this content, the Department of Housing and Real Estate Market Management (Ministry of Construction) has the following opinions:
Clause 1, Article 3 of the 2023 Real Estate Business Law stipulates: "1. Real estate business is an activity aimed at seeking profits through investing capital to create houses, construction works, land use rights that already have technical infrastructure in real estate projects for sale and transfer; leasing, subleasing, leasing-purchasing houses, construction works; leasing, subleasing land use rights that already have technical infrastructure in real estate projects; transferring real estate projects; real estate service business".
Clauses 1 and 3, Article 9 of the 2023 Real Estate Business Law stipulate the conditions for organizations and individuals doing real estate business as follows:
“1. Organizations and individuals when doing real estate business must establish enterprises according to the provisions of the law on enterprises or establish cooperatives, cooperative unions according to the provisions of the law on cooperatives, with real estate business lines and professions (collectively referred to as real estate business enterprises), except for the cases specified in Clauses 3 and 4 of this Article.
3. Small-scale real estate businesses are not required to establish real estate businesses but must declare and pay taxes according to the provisions of law.
Clause 1, Article 7 of Decree No. 96/2024/ND-CP dated July 24, 2024 of the Government detailing the implementation of a number of articles of the Law on Real Estate Business stipulates:
“1. Individuals doing small-scale real estate business must meet the following requirements:
a) Not falling into the case of having to prepare an investment project according to the provisions of law on construction and housing;
b) Not falling into the case of a value exceeding 300 billion VND per contract and having more than 10 transactions in a year. In case of 1 transaction in a year, the value is not calculated.
Based on the above regulations, individuals who fully meet the requirements specified in Clause 1, Article 7 of Decree No. 96/2024/ND-CP are considered to be in the case of small-scale real estate business and are not required to establish real estate business enterprises.
