Vietnam's Draft Real Estate Law Bars 5% Deposits, but Developers Still Collect 30% of Apartment Price Under 'Escrow' Label

October 31, 2026 - 19:30

Vietnam's draft amendments to the Law on Real Estate Business propose capping deposits for off-plan home purchases at 5 percent, a change aimed at curbing risky payment structures that have left buyers exposed when projects stall. The proposal would limit the first payment to a small share of the apartment price, a significant shift from current market practice.

Under existing rules, developers often ask buyers to pay much more before construction begins. Many collect around 30 percent of the apartment price, frequently labeling the sum as an escrow payment rather than a deposit. The distinction matters because deposit rules and escrow rules carry different legal protections, and buyers have little leverage once money changes hands.

The draft seeks to close that gap by tying early payments to clear limits. Supporters say the 5 percent cap would reduce the financial risk for households that buy homes before completion, especially in a market where delays and stalled projects have become common. Buyers who commit savings upfront currently bear most of the risk if a developer runs into financing trouble or misses construction deadlines.

Developers have pushed back, arguing that tighter limits on early payments could strain cash flow and slow project launches. Industry groups say construction relies on pre-sales revenue, and a strict cap may make it harder for smaller firms to fund work. Regulators counter that the current model concentrates too much risk on buyers and weakens confidence in the market.

The draft is expected to face further debate before it reaches the National Assembly. If approved, the rules would apply to new off-plan sales, changing how contracts are structured and how developers advertise payment schedules. Consumer advocates have welcomed the direction but say enforcement will decide whether the 5 percent limit actually protects buyers or becomes another label developers work around.