AS A FOREIGNER, HOW CAN I PURCHASE A PROPERTY IN VIETNAM?
1. AS A FOREIGNER, HOW CAN I PURCHASE A PROPERTY IN VIETNAM?
The housing law since July 2015 allows foreigners to purchase a property in Vietnam. Foreigners can own, inherit, lease, donate and resell properties in Vietnam.
Foreigners can own the property for 50 years. After 50 years, the government allows an extension for another 50 years.
2. CAN I BUY AND SELL MY PROPERTY TO A FOREIGNER OR VIETNAMESE?
Foreigners can only buy from developer and other foreigners.
Unlike Vietnamese who can only sell to Vietnamese, foreigners can resell to both foreigners and Vietnamese.
3. AS A FOREIGNER, IS THERE ANY LIMITS FOR THE OWNERSHIP?
Foreign organization or individual ownership of units in an apartment building may not exceed 30% of total units in one apartment building.
For housing projects with separate landed housing, the foreign organization and individual ownership may not exceed 10% of total units in one housing project.
For example: project has 100 apartment units and 30 villas, foreigners can buy up to 33 apartment units and 3 units.
4. WHY VIETNAMESE CANNOT SELL TO FOREIGNERS?
As a Vietnamese owner, if resell to foreigner, the government cannot control the foreign quota, therefore, Vietnamese cannot sell to foreigner.
5. WHAT IS THE OWNERSHIP STATUS WHEN I RESELL TO FOREIGNER AND VIETNAMESE?
If you sell to Vietnamese, they get freehold
If you sell to foreigners, the ownership will continue with the remaining age of the property and the title will still be the same.
For example: Foreigner own for 10 years and resell, new foreign buyer owns for the remaining 40 years
a. Long-term lease agreement: foreigner owns for 40 years with possibility of extension only if the Developer extends their business license
b. Sales and Purchase agreement: foreigner owns for 40 years but can extend ownership certificate for another 50 years
6. WHAT IS SPA?
SPA stands for Sales and Purchase agreement. This is a legally binding contract between the buyer and developer to prove that a house or apartment is sold to the buyer by the developer.
The SPA is used as evidence of ownership of the house or apartment before the house ownership certificate is granted to the owner.
The template for SPA is in accordance with the standard template as provided by the Ministry of Construction and is to be registered with Consumer Protection Bureau under the Ministry of Industry of Trade.
As such, the SPA cannot be amended or changed
7. WHAT ARE MY LEGAL RIGHTS WHEN I OWN AN APARTMENT/HOUSE?
• The right to involability of houses under his/her lawful ownership
• To use houses for residential purposes and other purposes not banned by law
• To be granted certificates for houses under his/her lawful ownership
• To sell, transfer sales & purchase contracts, lease, put for lease-purchase, gift, exchange, mortgage, lend, permit stay at, or authorize management of, his/her houses
• To use public facilities in the housing area in accordance with Housing laws and other relevant laws
• To maintain, renovate, demolish, or rebuild his/her house as prescribed in Housing Law and law on construction
• To receive the compensation as prescribed in regulations of law
8. HOW DO I TRANSFER MONEY FROM AND TO MY HOME COUNTRY?
a. Open a bank account in Vietnam and start to collect rental income to this bank account.
b. To remit money back to home country, foreigners must provide the bank with the new SPA between them and the new buyer and a tax declaration form.
9. DOES THE CLIENT MUST MAKE FULL PAYMENT FROM VIETNAM’S BANK ACCOUNT?
It is possible partially pay from overseas account and partially from Vietnam’s bank account
10. WHAT ARE THE FEES THAT I NEED TO BE AWARE OF?
a. Buying property: 10% VAT & 2% sinking fund (maintenance fee)
b. Rental income: 5% VAT and 5% Personal income tax
c. Resell property: 2% transaction fees
Registration fee with the government is 0.5%. This is to obtain the house ownership certificate, calculated on the apartment value.
11. WHAT IS SINKING FUND?
Sinking fund is commonly referred as maintenance fee, is a fund contributed by buyers of a development to maintain commonly owned areas of the development. It is used for maintenance, small repairs, medium repairs and overhauls of commonly owned areas to preserve quality. The sinking fund of a house/apartment is currently 2% on the price before VAT.
12. WHAT IS MANAGEMENT FEE?
This is a fee contributed by residents to managing operations of the development, such as operating the elevator system, generator and providing services for the building such as security, pest control, rubbish collection service, etc. Management fee is calculated per net salable area (NSA).
13. WHAT AND HOW IS THE NET SALABLE AREA?
Commonly referred as the carpet area. Net salable area (NSA) refers to the area for private use of the purchased apartment, which is measured by a clearance method and stipulated in the House Ownership Certificate granted to the buyer. It shall include the area of room-dividing walls built inside the apartments and area of balcony, loggia attached to such apartment (if any). It shall exclude the area of external walls, apartment-dividing walls, columns and service ducts inside the apartment. The NSA shall be stated in the pink book.
14. WHAT DOES THE PRICE OF THE PROPERTY INCLUDE?
It includes also the 5% for issuing the pink book (ownership certificate from government)
15. DOES THE BUYER MUST BE PHYSICALLY PRESENT TO PURCHASE THE PROPERTY?
a. Can transfer the deposit from a bank from their home country
b. Transfer other installments from bank account in Vietnam
16. WHICH BANKS CAN I OPEN ACCOUNT WITH?
There are several international bank options for you such as Standard Chartered, UOB, Bank of China, etc.
It is also advisable to open 2 bank accounts (US Dollars) and (Vietnam Dong)
17. WHAT ARE THE PAYMENT SCHEMES?
For project under construction, the payment scheme is decided by developers and agreed with purchasers. Housing laws limit the maximum collection before handover to be up to 70% for local Vietnamese developer and up to 50% for foreign developers. The law also stipulates that 5% is to be collected upon issuance of the pink book.
18. WHAT FEES ARE INCLUDED WHEN I DECIDE TO EXTEND MY OWNERSHIP CERTIFICATE AFTER 50 YEARS?
As the law is very new, since 2015, the government has not stated the fee.
But a minimum estimation for the general administration fee from the Government for any legal documents would be around USD 2,000.
19. WHEN TRANSFER MONEY TO VIETNAM, WILL IT BE VIETNAM DONG OR US DOLLAR?
If the money is transferred in USD, it will be automatically exchanged to VND based on the exchange rate at the bank at the point of time.
20. IS THE PRICE IN US DOLLARS OR VIETNAM DONG?
All the properties in Vietnam by law are sold in Vietnam Dong, the US Dollar price is only for reference