Foreign Property Ownership: What You Need to Know

By: CBRE

What are the rules on foreign property ownership in Vietnam? Taking effect from July 2015, the revised Law on Housing has brought about many positive changes in terms of foreign property ownership. This opened a new chapter for Vietnam’s residential sector, where local and foreign developers alike are working aggressively to tap into this new pool of buyers.

foreign property ownershipImage source: sbcinterlaw

Vietnam’s economy has been thriving in recent years. FDI into the country has been on an upward trend, and its real estate market has been booming since 2014 along with a great deal of infrastructure investments. It is evident that there is an increase in the number of foreigners looking to invest in Vietnamese properties.

The biggest change with this new policy is that now all foreign individuals who are granted entry into Vietnam and all foreign investment funds, banks, Vietnamese branches and representative offices of overseas companies are able to buy properties here.

In addition, they are allowed to buy not only apartments but also landed property (villas and townhouses), and their home ownership rights have been significantly relaxed. The previous law only allowed foreign home ownership to be strictly for owner-occupied purposes, while the revised one has allowed these properties to be sub-leased, traded, inherited and collateralised. The catch is that the total number of units owned by foreigners must not exceed 30 percent of the total units in one condominium complex, or 250 landed property units in one particular administrative ward or its equivalent.

  Current Laws (Effective July 1, 2015) Previous pilot scheme (Resolution No.19, effective 2009 - 2013)
 Eligibility

YES for all foreigners who are granted a visa to the country and not entitled to privileges and diplomatic immunity

YES with restrictions such as:

  • Individual investors who make a direct investment in Vietnam;
  • Expatriates who are hired by enterprises formed under the Enterprise Law for managerial positions;
  • Individuals who possess special skills that are needed in Vietnam;
  • Individuals who are married to Vietnamese citizens;
Product

Apartments + landed property (villas and townhouses)

Apartments only

Volume

The total number of dwelling units owned by foreigners must not exceed:

  • 30% of the total units in one condominium building;
  • 10% of the total landed property units in one residential compound;

250 landed property units in one particular administrative ward or its equivalent

 One apartment unit only
Purpose

The properties owned by foreigners can be sub-leased, traded, inherited and collateralised

Only for owner-occupied purposes
Tenure

50-year leasehold with renewal possibility;

Foreign individuals married to Vietnamese citizens are entitled to freehold tenure.

 50 years

Source: CBRE Vietnam, Q1 2017.

From whom can foreigners buy houses?

On the primary market: from developers of residential projects.

On the secondary market: only from foreign individual/entity owners (not from local owners) with the remaining ownership tenure (renewal possibility available upon expiry).

foreign property ownershipImage source: Phumyhung

Sub-leasing the house

Foreigners are allowed to sub-lease their houses, but they must report this activity to the district-level housing authority. Rental income is taxable, with the tax rate varying in accordance with the rental income.

Inward/outward remittances

Payment for the purchase of houses in Vietnam must be processed through a licensed credit institution in Vietnam (e.g. a bank). Sending money into Vietnam is relatively easy, though inflows should be properly documented to avoid any issues with the repatriation of profits later.

foreign property ownership

However, remitting money out of Vietnam is still a challenge for foreign home owners, who are expected to produce the necessary documents evidencing their source of income such as proof of income in Vietnam (if applicable), proof of inward remittances to Vietnam, a Sales & Purchase Agreement, etc.

Renewal of ownership

For a foreign individual who owns a house in Vietnam, the procedure for extending the ownership tenure is as follows:

1. Three months before the expiration of the tenure for house ownership, if the owner wishes to have the tenure extended, he/she must file an application for extension which specifies the extension length and includes a certified true copy of the certificate of the house, then send it to the People’s Committee of the province in which the house is located;

2. Within 30 days from the receipt of the owner’s application, the People’s Committee of the province shall consider and issue a written permission for one extension of the ownership tenure at the request of the owner. Such extension must not exceed 50 years from the original expiration date written on the certificate.

3. According to the written permission given by the People’s Committee of the province, the Certificate issuing body will write the extension on the Certificate, and send a copy of the Certificate to the Department of Construction of the same province for monitoring.

Looking forward

Vietnam’s property market may not be as transparent as its more developed counterparts, but it does present great opportunities. Some projects that have seen huge interest from foreigners include The Nassi m in the Thao Dien area or Empire City in the Thu Thiem area of District 2.

foreign property ownershipImage source: Thenassim

Going forward, as the market further develops and quality standards further improve, we believe there will be a growing presence of foreigners investing in Vietnamese properties after some time studying the market.

These buyers are more likely to look at projects from well-known developers with good track records, and/or those in good locations with capital growth and leasing potential, even though selling prices of these projects can be a lot higher than average.

Some governing laws and regulations

Name of regulation Code Relevant Chapter Effective Date
Law on Housing 65/2014/QH13 Chapter IX Jul 01, 2015
Decree on guidelines for the Law on Housing 99/2015/ND-CP Chapter II & VII Dec 10, 2015
Circular on guidelines for the Law on Housing and the Decree no. 99/2015/ND-CP 19/2016/TT-BXD Chapter IV Aug 15, 2016

Banner photo from Getty image

 


Gateway Thao Dien: Raising the Bar for Luxury

By: Aleksandr Smechov

Gateway Thao Dien is Ho Chi Minh City’s answer to high-end, exclusive living

Investors may be surprised by the level of commitment Gateway Thao Dien has shown. It seems delays and misinformation are common complaints for anyone investing in property in Ho Chi Minh City. Luckily, Gateway Thao Dien has delivered on its word, and even provided added value for its investors - something rarely seen in the local real estate market. There are four ways Gateway Thao Dien has kept its commitment to its demanding home buyers.

On Point and On Time

To date, Gateway Thao Dien has reached all of its milestones on time. Construction has been carried out in a timely manner. From the beginning of October, the status of the project has been going along smoothly: Tower A (The Aspen) and Tower B (The Madison) are expected to complete level 20 and 22, respectively, this November. This means the projects is on track for its expected completion of date of the last quarter of 2017.

World-Class Partners

Backing Gateway Thao Dien are a number of highly reputable contractors and suppliers. These companies all have outstanding track records, and were carefully chosen for their professionalism. Gateway Thao Dien put much effort into acquiring the support of these partners - and buyers can clearly see the results in the quality of the residential complexes, the timely execution, and the customer support given throughout.

Cofico: Since 1975, Cofico has been renowned as one of the leading contractors for both civil and industrial projects in Vietnam. Honored to be appointed as the main contractor for Gateway Thao Dien, the team at Cofico is making every endeavor to satisfy the developer’s requirements for progress, quality and safety. The company’s brand name will act as a guarantor for the construction quality of the project.

Mace: In charge of construction management and supervision of the Gateway Thao Dien project, the Mace Group is a global consulting and construction firm employing 4,600 people across 70 countries. Their management and supervisory team are actively ensuring that the high quality products selected by Gateway Thao Dien are given the proper level of treatment during installation.

Searefico: This company is responsible for providing Gateway Thao Dien with integrated mechanical and electric solutions, as well as equipping the project with modern, high quality products and utilities. Lifts have been installed from world-renowned Swiss elevator company, Schneider; Daikin air-conditioners and Mitsubishi generators have also been added to ensure quality airflow and uninterrupted power. Using Building Information Modeling (BIM), SEAREFICO helps minimise problems in the construction process, ensuring quality installation and quicker progress.

Arup: Known for their intelligent, sustainable structural design, among other high-quality services, Arup is an international firm with 13,000 staff across 42 countries. They have been responsible for some of the world’s most famous structures. They have assisted Gateway Thao Dien with the tower blocks’ structural design, as well as the project’s penthouse floors. Gateway Thao Dien is one of the tallest residential buildings in HCMC, and Arup ensures all the buyers this will be one of the safest places to stay, in terms of structure.

Eurowindow: High-end windows are supplied by Eurowindow. The high-tempered glass is soundproofed up to 40bB, with powder-coated aluminum frames. Complying with AAMA2604 standards, Eurowindow will offer a 20 year warranty for all of its products.

A Surprise Upgrade

Buyers will be delighted to know Gateway Thao Dien’s developers have upgraded many of the appliances that were initially agreed upon. In particular, most bathroom appliances from Kohler and Toto have been promoted to Duravit and Hansgrohe. Teka kitchen appliances have been upgraded to the German Bosch brand. Digital door locks have been changed from Samsung/Yale to Häfele from Germany. Entrance and internal doors will be provided by Sunwood, with the same specifications as for their Marina One project, one of the most luxurious multi-purpose high-rises being built in Singapore.

Steep Rise in Property Value

Metro Line 1 (Ben Thanh to Suoi Tien) is the first metro line in HCMC, with a total span 19.7km and a budget of US$2.49 billion. After the development of Line 1’s master plan, numerous projects began to spring up in the vicinity of the train line. As Line 1’s construction nears completion, property values will rise for anything in the line’s vicinity - that includes Gateway Thao Dien, which is right by the metro.

Contact information:

Website: www.gatewaythaodien.com.vn

Hotline: +84 9 3205 7979

Addresss: Gateway Thao Dien Sales Gallery, 53 - 55 Nguyen Dinh Chieu, D3


How to Buy a House or Land in Vietnam?

By: City Pass Guide

Foreigners who are living in Vietnam may purchase houses for the expressed purpose of dwelling in it. By Vietnamese law, land is a national good, so you can only own the structure built on a property, not the land that it is on. You can enjoy a “land use right” for up to 50 years. This duration can be renewed. Also note that if you’re married to a Vietnamese citizen or a Việt kiều, you will have the same ownership rights as Vietnamese citizens.

Seek professional advice to ensure that all steps are properly taken to ensure a troublefree property transfer.

Alternatively, according to Vietnam’s Housing Law, every foreigner who has a Vietnamese visa stamp on their passport can buy a property in Vietnam. However, if you enjoy diplomatic or consular immunities and privileges, this does not apply.

Besides individuals, foreign companies, branches, representative offices of foreign companies, foreign investment funds and branches of foreign banks that are operating in Vietnam are also entitled to purchase property of residential projects.


A serviced apartment in Diamond Island Luxury Residences

What are the limits of foreigners’ rights on residential property in Vietnam?

The law states that foreign individuals and entities may only buy, receive or inherit apartments and houses in commercial projects and not in areas that limit or ban foreigners.

Although the limit of one property per foreigner has been repelled, the new Housing Law sets a limit on the proportion of foreigners who may live in a determined area: the total number of units owned by all foreign buyers must not exceed 30% of the units in one apartment building, or 250 landed property units in one ward.

The duration of the tenure is supposed to be equal to the land use right owned by the developer, most likely 50 years, with an option to extend the land use right at the end of it. The exact conditions for the extension are still unclear and will be detailed in further regulations.


Crescent Residences in D7, HCMC

An expatriate may lease his/her property for any purpose that is not banned by law, but he/she must inform the provincial house management agency before leasing the property. In this case, he/she is subject to Vietnam’s property taxes. If you are an overseas Vietnamese or if you are married to a Vietnamese citizen, you are entitled to a freehold tenure on the property.

If you bought it, you could of course decide to live in the house but also lease it or pass it through inheritance to someone else without any difficulties. To lease it, you will need an administrative authorisation from the Housing Department of the People’s Committee where your property is located.

Can foreign-invested enterprises purchase residential properties in Vietnam?

Foreign-invested enterprises that operate in Vietnam under the investment law but are not engaged in real estate, can purchase residential houses for their employees. They must possess investment certificates or written certifications of investment activities as appropriate to investment forms specified by the investment law granted by a competent Vietnamese state agency. They can buy properties to house their employees, but are not able to use them for leasing or other purposes.

HCMC properties
Housing in Ho Chi Minh City. Photo: GettyImage

What are the steps to purchase a house in Vietnam?

1. Once you have chosen the property, you will have to sign a reservation agreement.

This legally links the buyer and seller and may include paying a deposit to the seller. Examine closely the reservation agreement before paying the deposit. It prescribes that if the buyer changes his mind, he will lose the deposit, and if the seller changes his mind, he will have to pay twice. You’re well advised to notarise this document to protect your interest.

2. Due diligence is the next step.

You will check the reliability of the seller by examining their ID or registration certificate along with the property’s certificates (for example the ownership certificate). You should also ask for a bank guarantee or insurance to ensure the seller is trustworthy.

3. Once due diligence has been satisfied by both parties, they confirm their engagement and interest by signing the housing contract.

An annex related to facilities that go with the apartment is advised. Make sure the agreement is signed by all related parties and if not, then by the representative who is mandated by the related persons. The contract on residential house purchase and sale must be in Vietnamese, so you will need a Vietnamese translator to help examine its content. Although many developers provide a bilingual version of the contract for a better understanding by all parties involved, only the Vietnamese version is valid under Vietnamese regulations. To help you with the complications involved with the contract, we list some details to look for before signing:

- Is it stated that the seller has the ownership certificate of the apartment and does he give a guarantee over this ownership?
- Is the apartment also a security for a loan?
- What are the responsibilities of the seller in case of dispute over the apartment ownership due to his fault?
- Methods used for payment?
- What are the responsibilities for tax and fees?
- What is the delivery time?

4. Paying taxes and fees.

Normally, if there is no other agreement between parties, the buyer pays the registration fee and the seller pays income tax. The payment shall be made at the tax department of the district where the house is located.

5. The last step is to apply for an ownership certificate.

Both parties can agree on how to handle issuance of the new certificate, although it is most likely that a buyer will have to take it up.


The Foreign Investor Guide to Real Estate in HCMC

By: Eric Le Dreau

Are you a foreign investor and want to know about real estate laws in HCMC? Confused by the new Property Law? Indochina Legal clears up the confusion:

One of the most notable changes introduced by Vietnam’s new 2014 property law and its regulations is the revision of the right for overseas Vietnamese, foreign individuals and organisations to own residential houses, as follows:

Overseas Vietnamese (or Viet Kieus) can now own residential houses in the same way as Vietnamese citizens without further residency requirements or any limitations on the type or quantity of houses, or the terms of ownership. They must hold a valid passport with an entry verification stamp marked by the Vietnamese Immigration Department (VID) and a document evidencing their Vietnamese origin.

Foreign individuals have the right to own residential houses, subject to certain restrictions as compared to Vietnamese citizens and Viet Kieus. In order to own houses, a foreigner is required to have a valid passport with an entry verification stamp marked by the VID and cannot fall under diplomatic or consulate preferences and immunities. Requirements of residency, investment in Vietnam, work permit, social contribution and/or marriage to a local Vietnamese is not necessary for residential housing ownership. However, as to ownership duration, foreigners married to Vietnamese citizens or to Viet Kieus are entitled to an indefinite term, whereas foreigners who are not can only own residential housing for a period of 50 years. This can be extended for another 50 years, subject to approval by the provincial People’s Committee where the house is located. Unlike other foreigners, those who are married to Vietnamese citizens are also exempt from notifying the housing administration authority at the district level prior to leasing their houses to others. Apart from that, the new legal framework grants foreigners the same rights of Vietnamese in the cases of subleases, mortgages, etc. of residential housing.

real estate in hcmc

Photo by: Manh Hai

Foreign organisations are allowed to own houses provided that (i) ownership term shall not exceed the period stated in their investment certificates issued by Vietnamese competent authorities, including any extensions; (ii) use of the houses is for residential purposes only, for their personnel; and (iii) lease-out of the houses is not permitted.

It is worth noting that foreign organisations and individuals shall not collectively own more than 30% of the total number of apartments in an apartment building or not more than 250 separate houses in an area where population is equivalent to that of a ward. In addition, house ownership beyond real estate projects (e.g. a villa built by individuals) is not allowed. For national defense and public security purposes, foreign individuals and organisations cannot own houses in certain areas. With respect to these limitations, the local Department of Construction will publish on their official website the projects where foreigners cannot own houses, detailed numbers of apartments or separate houses eligible for foreign ownership, and the number of houses where foreign ownership has been recorded. To our understanding, the database is not yet completely developed for all cities and provinces in Vietnam. Meanwhile, payment for purchase or lease of residential houses shall be made via credit institutions operated in Vietnam. So far there has been no specific instruction on foreign exchange control for relevant inbound and outbound foreign funding of residential housing.

Despite certain remaining limitations, the NHL has provided a more open approach to ownership of residential housing for foreigners. The hope is that these changes will ultimately defreeze the real estate market and create a new wave of foreign investment in Vietnam.

Website: www.indochinalegal.com


Buying Property in Vietnam

By: City Pass Guide

Vietnam property ownership for expats is a dilemma that has been here as long as the expats themselves. You come to Vietnam, fall in love with the country and settle down. But where will you live? Is it going to be rental property forever? You don’t intend on leaving so why not buy? It may surprise quite a few to realise that it is not as fraught with danger as you may think. It is certainly easier than in Thailand, and there is a lot less chance of you losing your hard earned money.

Vietnam Property Law Changes

The government changed the rules in July 2015, enabling foreigners to buy their dream home here, provided they match a few criteria. Anyone buying property here now has a lease of 50 years, with the ability to sell-on and transfer the lease.

Conic Residental Building in Binh Chanh (Photo by Đức-Huy)

According to the new law, foreigners and foreign entities will only be allowed to buy or take ownership of apartments and houses in commercial projects. They will still not be allowed to buy in areas that limit or ban foreigners. A maximum of 30% of apartments within a given block and 250 houses in a given ward will be available to expats. The 50 year lease will be able to be extended in the future, although details of exactly how this will be done will change over time.

People may think that not being able to buy the land and only the building upon it is unfair, but this is the same for the local population. The government maintains ownership of the land here. Since the announcement, a property market that was already heating up has really opened up and enabled foreigners to join the Vietnam property ladder. The country already had a strong economy and a very strong and vibrant middle class.

These new rules also apply to long term Vietnamese who, living abroad, have kept up their Vietnamese citizenship. With 4.2 million Vietnamese living overseas and about 30,000 high earning foreign executives working and living here (CNBC), the potential for local real estate companies is huge.

Big Changes for Ho Chi Minh City

The drive to modernise the city has meant that developments are springing up everywhere. The new prestigious tower being built in District 1 by Vinhomes is seen as a symbol of the future. At 461 metres, the Landmark 81 tower will be the tallest building in Southeast Asia.

Photo by Vinhomes 

Vietnam’s economy has a steady growth rate of over 5-7% per year. Almost 42,000 apartments were launched in 2015 with a record 36,000 of them being sold (Vietnambreakingnews.com). Vietnam does certainly look like a great place in which to invest. In Ho Chi Minh City, The top end properties are priced at $3,000 to $5,000 per square metre. This is way below the $9,375 per square metre you would have to cough up in Bangkok (Financial Times). And yet, rental yields here are 1.5-2.5% higher than those in Bangkok, Hong Kong and even Singapore, according to VinaCapital.


Top 10 Real Estates Websites in HCMC

By: Luke Nguyen

Buying, selling or renting a house in Vietnam, easy though it sounds, can be a challenge for a foreigner. The country’s real estate transactions have been based heavily on the traditional method of having an agent (or “co” - the housing stork) do all the work. People are now becoming more proactive in their choice of creating a home and taking advantage of online information to save costs and time.

Here are our top 10 picks for quality real estate websites in Vietnam. Despite the fact that only a limited number of them have a proper English interface, their information is valuable and can be translated easily using Google Translate.

Check out the 10 sites below:

1. batdongsan.com.vn

When it comes to housing and real estate, Bat Dong San is no doubt the number one portal in Vietnam. With the largest amount of information in its field, continuously updated and presented professionally in both Vietnamese and English, it satisfies a wide range of enquiries from visitors. Besides real estate information, it also provides visitors advice on architecture, construction, interior and exterior decoration, legal issues and feng shui.

2. muabannhadat.vn

With a friendly website layout, Mua Ban Nha Dat is a great source providing online solutions for marketers and real estate brokers. For investors, brokers and individuals who are active in the field, this site is one of their first choices to get quick market updates and details on upcoming real estate projects all over the country with a few quick clicks. The only downside is that they don’t have an English user-friendly interface, but as mentioned earlier, Google Translate can be a good way to explore.

3. zita.vn

Zita is one of the newest additions to the Vietnamese real estate field. With its clean, sleek layout including a city view home page video, Zita sets itself apart from the other competitors. The information on the site is presented beautifully with a neighborhood browsing feature and an interactive map for visitors.

4. dothi.net

Do Thi provides the fastest and most accurate market information in Vietnam. Through the advanced site browser, users can find all about buying, selling, renting across all provinces and cities in the country. News and featured projects sections are updated daily to keep visitors informed on the latest buzz in the field.

5. nhadat24h.net

Nha Dat 24h specialises in online real estate transactions, featured VIP promotions, advertising updates and latest market news.

6. 123nhadat.vn

With over 2 million real estate listings and an average of 5,000 housing posts per day, 123 Nha Dat provides market information, and post-purchase education and lease-free housing. Users can search for land, houses and apartments.

7. cafeland.vn

Cafeland is one of the leading real estate sites in Vietnam. Besides housing information, the website also provides up to date news and market analysis from experts in the field. The site also has a portfolio section which provides key details on real estate with specific and neatly presented information.

8. diaoconline.vn

Dia Oc Online aims to contribute to the sustainable growth of information-sharing and real estate infrastructure in Vietnam. Besides housing listings and information, consultancy on decoration, interior design and feng shui are also provided to users for reference. The featured agents section is also very interesting and informative.

9. dinhgianhadat.vn

This website lives up to its good name by providing qualified property valuation software to assist customers with making buying decisions easier. Besides real estate news and tips, Dinh Gia Nha Dat also features a cheap land and housing section and a promotion and auction space for buyers and investors.

10. kenhbds.vn

Kenh BDS supplies a wealth of resource materials for home buyers and sellers for big cities in Vietnam. The website is presented so that both buyers and sellers can make the most of its user-friendly interface and information.


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