Through its unique sensory synchronised design, virtual reality (VR) provides a convincing, user-centered experience of highly controllable scenarios. Importantly, VR is a promising modality for healthcare, where treatment efficacy has been recognised for a range of conditions. It is equally valuable across wider research disciplines. However, there is a lack of suitable criteria and consistent terminology with which to define VR technology. A considerable number of studies have misclassified VR hardware (e.g., defining laptops as VR), hindering validity and research comparisons. This review addresses these limitations and establishes a standardised VR qualification framework. As a result of a comprehensive theoretical and literature review, the Hardware-Based VR Qualification Matrix is proposed. The matrix criteria consist of: (1) 3D synchronised sensory stimulation; (2) degrees of freedom tracking; and (3) visual suppression of physical stimuli. To validate the model and quantify the current scale/diversity of VR misclassification, a 2019 sectional review of health-related studies was conducted. Of the 115 studies examined against standardised criteria, 35.7% utilised VR, 31.3% misclassified VR, 18.3% were considered quasi-VR, and 14.8% omitted critical specifications. The proposed model demonstrates good validity and reliability for qualifying and classifying VR.