Vietnam Imposes Hefty Fines for Cash Payments in Real Estate Deals

Vietnam has introduced new regulations imposing hefty fines for cash payments in real estate transactions. Effective August 26, 2024, Decree 339 stipulates that real estate project developers and businesses accepting contract payments outside of bank transfers will face fines ranging from VND240 million to VND300 million (approximately $9,500 to $12,000 USD). This provision, which specifies the 2023 Law on Real Estate Business, mandates bank transfers for real estate transactions and services. However, individuals engaged in small-scale real estate dealings or those selling or leasing property for non-commercial purposes will still be permitted to conduct transactions in cash. Furthermore, Article 77 of the Decree introduces penalties related to anti-money laundering efforts. Real estate service providers failing to report suspicious or large-value transactions, or providing untruthful information, will be fined VND40 million to VND80 million (approximately $1,600 to $3,200 USD) and may face business suspension for one to three months. Experts suggest that the new regulations could help curb "dual pricing" practices, off-contract cash receipts, and revenue concealment, thereby enhancing transparency in real estate business operations. This is expected to improve regulatory oversight of transactions and aid in combating money laundering. Additionally, the fine for conducting real estate business without establishing a legal entity will be raised to VND120 million to VND160 million (approximately $4,800 to $6,400 USD). This penalty also applies to individuals who misuse housing or construction works purchased, leased, or rented. Developers failing to disclose project or product information transparently before sales can expect fines of VND300 million to VND400 million (approximately $12,000 to $16,000 USD), a more than threefold increase from previous rules. These measures reflect the Vietnamese government's commitment to sanitizing the market and curbing illicit transactions, particularly in the booming real estate sector, a key investment area amid Vietnam's rapid economic growth.