REQUIREMENTS AND OBLIGATIONS FOR BUYING A PROPERTY IN VIETNAM
The real estate market in Vietnam is quite appealing to both domestic investors as well as a large number of foreigners and Viet Kieu (Vietnamese citizens who live abroad). While Vietnam’s economy is growing, buying a property is both a place to live and a wise investment.
Does Vietnam allow foreigners to buy a property?
According to Vietnamese law, foreigners or foreign entities may buy a property in Vietnam by making investments in project-based commercial housing development, purchasing through hire-purchase agreements, or inheriting or receiving project-based commercial properties but not in areas where foreign ownership of properties is restricted.
The following list of foreign organizations includes them:
(i) foreign companies investing in the development of commercial housing projects;
(ii) foreign representative offices and branches of foreign companies;
(iii) foreign funds operating in Vietnam and branches of foreign banks;
(iv) foreign-direct investment companies in Vietnam.
For foreigners, the procedure can only begin if they are legally permitted to do so under Vietnamese law.
Due to the new Housing Law, foreigners are currently permitted to own multiple properties. A foreigner or a foreign corporation is still only permitted to acquire a certain number of properties in some regions.
Requirements for Buying a property in Vietnam
You must either be legally permitted to enter Vietnam or participate in a housing development project there in order to be able to purchase a property there.
Individuals who Are Legally Allowed to Enter Vietnam
Do not have diplomatic privileges or immunity
Foreign Individuals who Want to Invest in Projects
Obtain an Investment Registration Certificate
Own project-based properties following the Housing Law of Vietnam
Not including constructions in areas related to national defense and security
Rights and Obligations for Buying a property in Vietnam
Foreigners or foreign businesses that wish to buy a property in Vietnam must abide by a number of requirements set forth in the country’s housing law. As property owners, they are also entitled to certain privileges.
If there is just 01 housing development in an area with a population that matches a ward
Foreigners or foreign entities will not own more than 10% of the total houses of each housing construction project or 250 houses of such project, whichever comes first, including row houses, separate houses, and villas. If there is more than one project in such an area, foreign entities may own up to 10% of detached houses of each project and up to 250 houses of all the projects.
If there are more than one housing projects in an area whose population is equivalent to that of a ward
Detached homes from any other project within that region may not be sold to or owned by foreign entities or foreigners as the number of detached homes owned by such parties has reached the maximum.
In an apartment building (including multipurpose apartment buildings), foreigners or foreign entities may own up to 30% of residential apartments. If an apartment building has more than one unit or block, foreigners or foreign entities may own up to 30% of residential apartments of each unit or block.
Foreigners or foreign entities shall not own more than 250 houses including row houses and villas, or rent/buy/inherit/receive more than 30% of apartment units in the same apartment building.
When purchasing a home in excess of the permitted amount, a Long Term Lease Contract (LTL) must be signed.
In accordance with the agreement, on property sale, lease purchase, giving, or inheritance commencing from the day they acquire the property ownership certificate, foreign nationals’ property ownership is only valid for no more than 50 years.
The rights of foreigners as property owners are comparable to those of Vietnamese citizens.
Foreign entities’ right to own a property is only valid for the time period specified on their investment certificate, beginning the day they acquire their Investment Registration Certificate.
How to buy a property in VietNam?
The basic stages for foreigners or foreign corporations to buy a property in Vietnam are as follows:
- Make a property choice and agree to a reservation. It is suggested that you have a professional check your reservation agreement before you sign.
- Send the vendor of the property a deposit.
- Hire a due diligence expert to look into your background. The seller’s identification, registration information, property information, ownership information, and other documents should all be checked.
- Signing the property contract will confirm the transaction. Before you sign the contract, have the contents reviewed by a Vietnamese translation.
- At the local tax office where the property is located, pay any due fees and taxes. The registration fee will be paid by the buyer, and the seller will cover the income tax.
- Make a request for the ownership certificate.
Taxes and fees when a foreigner buys a property in VietNam
Vietnamese and foreigners who buy a property are both subject to the same tax and fee responsibilities under Vietnamese law. The following taxes and levies may be charged to foreigners who buy a property in Vietnam:
– Income tax for property transfers: The income tax for property transfers is 2% of the transfer value. The buyer and seller can agree on this cost.
– Application fee: The application charge for a pink book is 0.5% of the asset value.
For added security while buying a property in Vietnam, in addition to the first two expenses mentioned. Some expats may pay an additional cost to retain a lawyer to perform due diligence, help them choose a project or apartment, and aid in the acquisition process.
Please contact Liveinsaigon.vn (LIS) immediately for more specific advice on the real estate purchasing process of any project, or you can also get in touch with us for consultation and information about worthwhile real estate investment projects in Vietnam.