Foreigner’s Guide to Buy Property in Vietnam

Foreigner’s Guide to Buy Property in Vietnam

Over the past few decades, Vietnam has remained a favorite expat destination in Southeast Asia. Given that the country has inexpensive property prices, a low cost of living, many jobs and business opportunities, stable politics, a thriving economy, and friendly people, many foreigners want to buy properties to settle in Vietnam.

However, there are still some legal conditions and obstacles a foreign buyer must navigate. In this guide, we’ll run through some basics of what foreigners need to know when buying property in Vietnam as a foreigner.

1. Can foreigners buy property in Vietnam?

The answer is “Yes”. According to the Law on Residential Housing 2014, foreigners can buy and own houses in Vietnam, meaning both apartments and separate houses in commercial housing projects can be purchased. However, foreigners only have ownership of the house, but not of the land. In other words, foreigners are not subject to land use rights (commonly known as land purchase/sale) in Vietnam.

The conditions for foreigners to buy property are simple: a foreign individual should have a valid passport with an entry verification stamp of competent authority upon immigration and is not entitled to diplomatic and consular privileges and immunities.

Vinhomes commercial housing project
Vinhomes commercial housing project

2. What kind of property can foreigners buy?

Here are 03 property types that foreigners are eligible to buy and own:

  • Apartments/condos in commercial housing projects
  • Separate houses in commercial housing projects, such as: townhouses or terraces, shophouses, and villas.
  • Project-based housing built by foreigners (*)

(*) Within the scope of this Article, Nova Law will only focus on the homeownership of foreigners who do not invest in or implement housing projects.

An apartment in Vietnam
An apartment in Vietnam
Townhouses in Vietnam
Townhouses in Vietnam

3. Restrictions applied to foreigners when buying a property

Foreigners can easily buy and own houses in Vietnam, but with certain legal restrictions in accordance with Deeecree 99/2015/ ND-CP:

  • Foreign buyers are only allowed to buy houses directly from (i) investors of housing projects, or (ii) foreign organizations/individuals’ house owners;
  • Foreigners only can inherit or receive houses owned by Vietnamese individuals/households/organizations. It means that technically, foreigners can’t buy houses from Vietnamese homeowners;
  • Foreign buyers must make payments for house purchase transactions via banks operating in Vietnam;
  • Foreign buyers are prohibited to buy houses in areas where national defense and security;
  • Foreigners only can own: no more than 30% of the total apartment number of an apartment building project; or no more than 10% of houses, or 250 houses of each housing project, depending on the specific case.Foreigners buy properties in Vietnam

4. How long can foreigners retain property ownership?

The maximum term of a foreigner’s home ownership is 50 years and can be extended. Specifically, a foreign individual is entitled to own a house for a duration as agreed upon in the contract of sale, lease purchase, donation, or inheritance agreement, but not over 50 years from the grant date of the Home Ownership Certificate (or Pink Book). The homeownership duration can be extended if requested.

Before the expiration of the homeownership, the homeowner may sell this house to subjects who are eligible to own houses in Vietnam. If the homeownership term expires but the owner does not sell or donate the house, the house shall belong to the state ownership.

In case a foreigner marries a Vietnamese citizen or a Vietnamese residing abroad, he/she then is entitled to own a stable and long-term house, and have the same rights as Vietnamese homeowners.

A villa at EcoPark

5. How to buy a property in Vietnam as a foreigner?

Here is a step-by-step guide for foreigners when buying a property directly from the investor of commercial housing projects:

  • Step 1: Find a suitable property
  • Step 2. Sign a house sales and purchase contract with the investor
  • Step 3. Notarize the contract at a public notary office
  • Step 4. Make the house payment via bank transfer
  • Step 5. Submit an application for a Certificate of Home Ownership
  • Step 6. Receive a Notice of real estate registration fee payment, and pay tax
  • Step 7. Return the tax invoice and receive the Certificate (Pink Book)

(Step 5, step 6 and step 7 normally will be performed by the Investors)

Certificate of house ownership
Certificate of house ownership, or Pink Book

6. Tax implications and fees for foreigners buying property in Vietnam

No.Fee/TaxRate
1Registration fee0.5% x property transfer price
2Personal Income Tax for the income from real estate transfer (applicable to property sellers)2% x property transfer price
3Fee for notarizing the contractTo be determined based on the property transfer price
4Fees for appraisal of dossiers for issuance of land use right certificates Depending on each city.

For example, the fee in Hanoi is 0.15% x property transfer price, but up to 5 million VND/dossier

5Fees for issuance of Certificate of Home OwnershipLess than 100,000 VND

7. Can foreigners apply for mortgages in Vietnam?

Technically – yes they can. However, foreigners applying for a mortgage in Vietnam should be aware that the process can take some time and the options and terms available to you may not be as favorable as those on offer to Vietnamese citizens. For example, the term for a foreigner to borrow a mortgage must not exceed the remaining period of a residence permit in Vietnam.

In fact, foreigners buying a house “with all cash” is the most popular option, with a faster closing process than with a mortgage loan.

8. Can foreigners lease the property to third parties?

The answer is “Can”. Foreigners can lease their properties to third parties if these 2 conditions are met:

  • Before leasing a property, the homeowner must submit a written notice of the rental to the local housing management authority. If a business registration is required by law for housing rental, the foreign homeowner must make a business registration. When terminating a house lease contract, a written notice must be sent to the district-level housing management division where the house is located for monitoring and management.
  • The homeowner must pay personal income tax on income arising from housing rental activities.

Lease apartment Vietnam

9. Can foreigners sell properties?

Can. Foreigners may sell their houses to buyers eligible to own houses in Vietnam. If the house ownership period expires but the owner fails to sell them, such houses will belong to the State. Foreigners are strictly prohibited from buying houses for resale for business purposes.

10. Does buying a property in Vietnam give foreigners residency?

No, it doesn’t. You may have ownership of a house based in Vietnam, but this does not give you any right to residency. In fact, your immigration status will remain the same.

Foreigners can consider other options to get a long-term visa in Vietnam, which are:

Conclusion

Basically, foreigners are permitted to buy properties in Vietnam, but it comes with conditions in order to legally buy, own, and sell the properties. So make sure that you understand and are able to comply with these rules before you get started.

Nova Law hopes that this article can provide you a legal insight regarding foreigners buying and owning properties in Vietnam. We wish you soon find a dream home and have a successful transaction to settle in Vietnam. If you have further requests on company registration or applying for visas in Vietnam, do not hesitate to contact Nova Law.

Keep LearningView all Posts

Leave A Reply

Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments
error: Content is protected!!