There is a common misconception that foreign citizens or companies cannot own property in Vietnam. In reality, it is possible. However, there are certain conditions that you need to bear in mind when buying property in Vietnam.
We have put together this guide to shed light on ways how foreign investors can obtain property in Vietnam.
Vietnam’s new law to foreign ownership of property
Below, I’ve summarized the most important information to take note of the new law:
- Foreigners can buy properties by simply possessing a tourist visa
- There’s no cap to the amount of properties you can buy
- Foreigners are restricted to buying a maximum of 30% of the units in condominiums and cannot own more than 10% of the properties in a landed project
- Foreigners can now buy houses, but only 250 of the houses in a given ward (division). To read more about the districts and wards in Saigon, I recommend you to check this wiki-page
- The leasehold period is still 50 years, but can be renewed
- If you have a Vietnamese spouse, you can get a freehold tenure
Who can lease land in Vietnam?
Citizens of Vietnam, local organizations or foreign-owned companies can purchase the right to use land and to build on it.
The length of a lease agreement that allows you to use land in Vietnam depends on the government. In general, the maximum length is 50 years, and it is also possible to renew the agreement for another 50 years.
Can foreigners buy property from Vietnamese people?
Foreigners often buy property directly from developers on the primary market, or from foreigners that previously bought property on the primary market.
There are restrictions on the secondary market as you can’t buy property from local citizens in case the foreign quota is already filled (30%).
See more: Apartment For Sale In Ho Chi Minh City
Vietnam ownership certificates of property
When you purchase a property from a developer, it’s important that you receive an ownership certificate. In 2017, foreigners had issues getting their property ownership certificates, this understandably caused some frustration.
So why did this happen?
According to law, foreigners cannot own properties in areas that are reserved to protect the national defense and security.
And it’s up to the Ministry of National Defense and the Ministry of Public Security to decide whether a property is located in an area that is reserved to protect the national and security.
I cannot stress the importance that you make sure that your prospective property can be owned by you as a foreigner, and confirm, prior to the purchase, that you will be able to receive the ownership certificate.
The pink book
The ownership certificate is often referred to as the pink book. The name comes from the small pink book that you should receive after you purchased a property.
The book shows your ownership and rights of your property. It will give you right to lease your property and declare information regarding inheritance, for example.
Shortly speaking, pink books are used for the title to verify the ownership of properties.
The red book
There’s also a red book that’s been used for a longer time than the pink book. The red book is used for the title to ownership of land, instead of physical structures, like houses and condos.
Thus, the pink book is more common for foreigners that normally invest in properties like condos, which are less regulated.
Do I need to receive the pink book when buying property in Vietnam?
Shortly speaking, the pink book is used for the title to ownership of property. Even if an SPA (Sales and Purchase Agreement) can be used to prove that you bought the property, the strongest evidence of ownership is to have both of them.
Remember:
- The pink book is considerably the strongest proof of ownership, though it’s not a legal requirement to have one
- The SPA (Sales and Purchase Agreement) is equally, if not more, important
- You can face more difficulties to sell your property without having the pink book
What does the pink book include?
The pink book declares that you can:
- Use your house for residential and other purposes
- Demolish, maintain, renovate or rebuild your house, if complying with the conditions and procedures of Laws on construction
- Do transactions when selling, mortgaging or leasing the property
Process when buying property in Vietnam
Before you decide to invest in Vietnam, you need to understand the buying process. You don’t want any surprises or unknown fees to come up later in the process.
Below, I have made a list of important items you need to consider during the buying process.
1. Paying for a property in Vietnam
This is the initial step of the process, and an important one. Do you plan to pay with cash assets, housing loan or a combination of both?
In Vietnam, it was previously common that locals paid with real gold, due to the volatility in VND (Vietnamese Dong). This is not the case anymore though.
Nowadays, transactions are normally made in VND (USD can’t be used when buying property in Vietnam).
2. Why do you plan to buy?
You also need to ask yourself why you want to invest in Vietnam.
If you look for high appreciations, developing areas in Ho Chi Minh City can be a good choice, as it’s currently attracting a lot of foreign companies, expats and wealthy locals.
If you look for a beach side resort, Da Nang or Nha Trang could be better choices. Da Nang has experienced great increases in housing prices recently and gets heavily developed.
Later in this article, I will explain more about interesting places for property investments. You can also read my separate articles that list new upcoming property projects for sale in Ho Chi Minh City, and other cities.
See more: View apartment list for sale in Vietnam
3. Hiring a property lawyer in Vietnam
I recommend you to hire a Solicitor (lawyer)for larger transactions, and when buying landed property. The Vietnamese market opened recently to the foreign world, so there can be some roadblocks on the way.
However, foreigners rarely hire property lawyers when buying condos on the primary market. Reputable developers (like Novaland and CapitaLand) primarily build and manage the new condo projects you seen in Ho Chi Minh City.
You’ll find both local and foreign developers that are reputable, follow standards, and have managed dozens of projects in the past.
Normally, your estate agent or developer will involve a property lawyer where needed throughout the process.
4. Booking a property/condo
When your agent has helped you to find a project and unit you like, it’s time to pay a non-refundable deposit of VND 100 million.
The deposit is paid by credit card or bank telegraphic transfer, whereby you sign the Option to enter into Deposit Contract Agreement.
5. Pay the first installment & enter Deposit Contract
You need to pay the first installment within 14 days after you’ve paid the first deposit. The payment is managed by bank transfer.
When you’ve paid the first installment, you’ll enter into the Deposit Contract and the Deposit Contract shall be non-transferable.
6. Pay the following installments per schedule
Pay the following installments as concluded in the contract.
7. Sales & Purchase Agreement (SPA)
Drafting and execution of the SPA (if eligibility for foreign ownership is confirmed) and the SPA shall be transferable.
8. Handover of the unit
Before you can acquire the unit, you need to pay the maintenance fee (2% of the purchase value).
On top of the maintenance fee, you need to pay 1 year of management & operation charges, the registration fee (0.5%), and an additional installment.
9. Preparation for granting the pink book
When you’ve signed the SPA and managed your financial obligations, you need to submit documentation for the application to receive the pink book.
10. Final payment
Make a final payment within 14 days after you’ve taken notice to receive the pink book.
NOTE: To know more information of real estate in Ho Chi Minh City, let call hotline or chat with us
See more: Hot Apartments For Sale In District 2
0 comments:
Post a Comment