Foreign Property Ownership: What You Need to Know
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.
Image 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:
|
| Product |
Apartments + landed property (villas and townhouses) |
Apartments only |
| Volume |
The total number of dwelling units owned by foreigners must not exceed:
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).
Image 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.
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.
Image 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
