(Vietnam) Buying properties: A guide to foreigners

Thanks to the new Housing Law from July 1st, 2015 any foreign individual as well as a foreign entity without diplomatic immunity and privileges has the right to buy and own freehold real estate in Vietnam. It worth noting that recently Vietnam has been the most closed country in the region but now ownership rights for foreigners are secured better than in any other part of Asia. This article will give you the most recent information about the real estate market in Vietnam, real estate purchasing processes, maintenance costs, taxes, mortgages and pricing.

Ho Chi Minh City, often referred to as Saigon by the locals, is Vietnam’s largest city and one of Asia’s fastest-growing.

Can a foreigner own land in Vietnam?

Private ownership of land is not permitted in Vietnam and the people hold all ownership rights with the State as the administrator. However, the laws of Vietnam allow ownership of a right to use land.  This right is called the Land Use Right (“LUR”). LUR to foreign investors allows title holders to conduct real estate transactions, including mortgages.

Can a foreigner own houses in Vietnam?

Foreign organizations and individuals eligible for the homeownership in Vietnam include:

a) Invest in project-based housing construction in Vietnam

b) Are foreign-invested enterprises, branches, representative offices of foreign enterprises, foreign-invested funds and branches of foreign banks operating in Vietnam (hereinafter referred to as foreign organization).

c) Are allowed to enter Vietnam.

Foreign organizations and individuals are eligible for the homeownership in Vietnam if they:

a) Invest in project-based housing construction in Vietnam.

b) Buy, rent and purchase, receive, or inherit commercial housing including apartments and separate houses in the project for housing construction, except for areas under management relating to national defense and security as prescribed in regulations of the Government.

What documents does a foreigner need to claim his/her homeownership in Vietnam?

1. A foreign individual is required to have an unexpired passport bearing the entry seal of the Vietnam’s immigration authority and not given diplomatic immunity and privileges according to Ordinance on diplomatic immunity and privileges of diplomatic missions, consular offices, and representative authorities of international organizations in Vietnam.

2. A foreign organization is required to have an Investment certificate (or a Permission to run business in Vietnam) and have houses which are built under a project.

What rights does a foreigner owning house(s) in Vietnam have?

If the foreigner invested in project-based housing construction in Vietnam, he/she is entitled to exercise rights of homeowners as prescribed in Article 10 of Law on Housing 2014. If his/her house is built on a piece of leased land, he/she is only entitled to lease that house.

A foreign organization or a foreign individual who is allowed to enter Vietnam is entitled to exercise rights of homeowners similarly to Vietnam citizens provided that he/she comply with following regulations:

a) He/She may not buy, rent and purchase, receive, inherit and own more than 30% of apartments in an apartment building; or more than 250 houses regarding separate houses including villas, row houses in an area whose population is equivalent to a ward-administrative division.

b) In case he/she receives or inherits house(s) NOT in the project for housing construction, or in the areas under management relating to national defense and security as prescribed in regulations of the Government; or exceeding the number of houses prescribed in Point a, he/she only receives the value of that house(s).

c) The foreign individuals are eligible for the homeownership as agreed in agreements on housing sale, lease purchase, gifting, or inheritance for not more than 50 years, from the day on which they are granted the Certificate and they may be also granted extension as prescribed in regulations of the Government; the duration of the homeownership must be stated in the Certificate.

If a foreign individual marries to a Vietnamese citizen or an oversea Vietnamese, he/she qualifies for stable and long-term homeownership and has all rights of homeowner similarly to Vietnamese citizens.

d) The foreign organization is eligible for the homeownership as agreed in agreements on housing sale, lease purchase, gifting, or inheritance for not longer than duration stated in their Certificate of investment, including extension duration, the duration of the homeownership shall be determined from the day on which the organization is granted the Certificate and stated in such Certificate;

Before the time limit of the homeownership stated above expires, the homeowner is entitled to gift or sell their house(s) to entities eligible for the homeownership in Vietnam.

Property purchasing process in Vietnam

1. Real estate agencies can provide the buyers a list of options. Certainly it can be done by the buyers themselves but it is worth noting that in Vietnam such services are free for the buyers since the seller is paying the commission to the agency, so the buyers can save huge amount of time and effort by accepting consultancy services and professional support from the agencies.

2. Obtaining Ownership: Certificate of Land Use Right and house and land-attached asset ownership (also call Pink book in Vietnam due to the color of its cover) is usually issued within 6 months of development handover at a cost of 0.5% of the property price.

3. Sales and Purchase Contract (SPC) signing: If you are buying property on the secondary market, it is strictly required by law to notarize the SPC (the usual notarization fee doesn’t exceed US$100). If the seller is a developer, it is his obligation to register the SPC at the local Department of Construction and local Tax Office and notarization is voluntary.

4. Payment Methods. A real estate purchase transaction does not require a bank account involvement as payment can be done in cash. However it is strongly recommended to make every payment using a bank transfer in order to avoid any questions regarding the source of money in the future or when you decide to sell your unit and get this money out of Vietnam.

Collected and Composed by BeInvestor.net in accordance with Vietnam Housing Law 2014