Vietnam Real Estate for Foreigners - Frequently Asked Questions
Can foreigners buy real estate in Vietnam?
Since July 1st, 2015, foreigners can legally purchase and own an unlimited number of properties in Vietnam based on a 50-year ownership term, renewable for further 50 years upon expiry.
Who can I buy a property from and who can I sell it to?
Foreigners can only buy directly from a property developer or other foreigners. Foreigners can resell to both foreigners and Vietnamese citizens, while Vietnamese can only sell to other Vietnamese.
Are there limits to real estate acquisition for foreigners in Vietnam?
Foreign ownership (organizations or individuals) of units in an apartment building may not exceed 30% of total units. For example, if a project includes 100 units and 30 houses, 33 units and 3 houses can be owned by foreigner buyers.
Why can’t Vietnamese sell to foreigners?
If a Vietnamese owner resells their property to a foreigner the government cannot control the foreign ownership quota. Therefore, Vietnamese can only sell to other Vietnamese.
Does the buyer need to make the payment in full, from a Vietnamese bank account?
No, it is possible to partially pay from an overseas account and partially from a Vietnamese bank account.
What fees should a buyer/seller be aware of?
a. When buying property: 10% VAT & 2% sinking fund (maintenance fee)
b. Fees for Rental income: 5% VAT and 5% Personal income tax
c. Resale of property: 2% transaction fee. 0.5% fee for registration with the government. This fee is to obtain the house ownership certificate and is calculated based on the dwellings value.
What is a sinking fund?
This is a fund that buyers contribute to for the maintenance and repair of public/common areas of the development to maintain a high standard of quality. The sinking fund of a unit is currently 2% on the price before VAT. A sinking fund is commonly referred to as a maintenance fee.
What is a management fee?
This is a fee covering the managing operations for the development. Examples of what falls under this fee are operations and maintenance expenses for the elevator systems, backup generator(s) and other essential building services such as security, pest control, rubbish collection, etc… The Management fee is calculated per net salable area (NSA).
What is the 'net salable area' and how is it calculated?
Commonly referred to as the carpet area, Net Salable Area (NSA) refers to the area for private use of an apartment. ‘NSA’ is measured by a clearance method and stipulated in the House Ownership Certificate granted to the buyer. It includes the area inside the apartment and the area of balconies attached (if any). It excludes the area of external walls, apartment-dividing walls, columns and service ducts inside the apartment. The NSA is stated in the pink book.
What does the purchase price of the property include?
The price includes a 5% fee for issuing the pink book (ownership certificate from the government)
Does a buyer have to be physically present to purchase a property?
No, a foreign buyer can transfer the deposit from his home country bank and future installments from a bank account in Vietnam.
Which banks can a foreigner open an account within Vietnam?
There are several international banks that a foreigner can open an account with including Standard Chartered, UOB, and Bank of China (to name a few). It is advised to open two accounts; one in US Dollars and one in Vietnamese Dong.
What is the payment schedule for an under construction project?
The payment schedule is decided by the developer and agreed upon by the buyer. Housing laws limit the collection before handover to up to 70% for local Vietnamese developers and up to 50% for foreign developers. The law also stipulates that 5% is to be collected upon issuance of the pink book.
What fees am I required to pay when/if I extend my ownership certificate after 50 years?
The law, which came into effect in 2015, does not have a stated fee as of yet. The general government administration fee for any legal document is around $2,000 USD.
When transferring money to Vietnam which currency will it be in?
Foreign currency will automatically be exchanged to VND based on the bank’s exchange rate at the time of the transfer.
Is the purchase price in US Dollars or Vietnam Dong?
By law, all properties in Vietnam are sold in Dong. The price in US Dollars is only provided for reference.
Can a foreigner purchase a property as a company?
In general Vietnamese law prohibits foreigners from incorporating a holding company to purchase property. Existing trading companies can purchase property, but the ownership terms are limited to the duration of the business license (typically 10 years)
Are there financing options available to foreigners in Vietnam?
Currently there are no financing options available to foreigners in Vietnam. Vietnamese nationals are able to obtain a mortgage through most banks.
What is the difference between a red book and a pink book?
A Red Book is a certificate of land use right. If the owner of Land Use Right is also the owner of Land-attached Assets, such Owner shall be granted a Red Book recording Ownership of Land Use Right and Ownership of Land-attached assets. A Pink Book is a Certificate of Land-Attached Assets only. Therefore, a Pink Book shall be granted if the Owner of Land-Attached Assets is not the Owner of Land Use Right.
What is the ownership extension process for foreigners?
The law allowing foreigners to purchase property in Vietnam was introduced in 2015. As these leases have not yet begun to expire, there is no current framework or process in place. Vietnamese government officials are pushing for clarification on these procedures.
Will condotel buyers receive a pink book?
Historically condotels have not been issued traditional residential pink books. The Vietnamese government passed legislation in March of 2020 allowing condotels to receive “Condotel Pink Books”. These have yet to be implemented.
What is a rental program?
Many condotel projects and similar investment properties have rental programs that allow the buyer to hand the unit back over to the developer or a third party management company. The owner is entitled to a guaranteed % return on the original sales price or a split in operation profit. These programs vary in length, return, and obligation. Some properties require owners to include their unit in a rental program, while others allow the option to reside in the unit themselves. Rental programs generally include 2-4 weeks of free personal-use of the unit.
What documents are needed for the transfer of a property?
The following documents are required for the transfer of a property:
– Application for transfer of the land use right and assets attached to land
– Certificate of house ownership and residential land use right (pink book)
– Permanent address of the buyer and seller
– Notarized or authenticated transfer contract of the land use right and assets attached to land
– Identification (ID) of buyer and seller
– Marriage certificate of buyer and seller (if applicable)
– Extract of land parcel (optional)
What is the liquid ability of a property?
Liquidity describes the degree to which a property can be quickly bought or sold in the market at a price reflecting its intrinsic value.
What does SPA refer to?
SPA stands for Sales and Purchase Agreement. A Sales and Purchase agreement is a legally binding contract outlining the agreed upon conditions of the buyer and developer for the ownership transfer of property. The SPA is used as evidence of ownership until the house ownership certificate is granted. The SPA is in accordance with the standard template provided by the Ministry of Construction and must be registered with the Consumer Protection Bureau under the Ministry of Industry of Trade. As such, the SPA cannot be amended or changed.
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