Vietnam Property Buying Guide

Things foreigners need to know when buying property in Vietnam

After Vietnam promulgated the Vietnam Housing Law in July 2015, foreigners can buy real estate in Vietnam with confidence.

Vietnam’s foreign ownership laws

Here are some important things you need to know about foreign ownership laws:

• Foreigners can also buy real estate in Vietnam if they have a tourist visa
• There is no limit on the number of properties a foreigner can buy in Vietnam, but they cannot buy more than 250 units in the same condominium.
• Foreigners can purchase up to 30% of the properties in the same condominium project.
• The lease term is 50 years
• If you are married to a Vietnamese, you can have ownership.

Can foreigners buy land in Vietnam?

According to the Vietnamese Constitution, this land belongs to the state and is jointly owned by the people and the collective. Foreigners cannot buy and own any land.

However, according to Vietnam's national land "Housing Law", foreign organizations and individuals can lease land. The maximum lease term is 50 years. In special cases it can reach 70 years.

Vietnam’s foreign ownership laws

Here are some important things you need to know about foreign ownership laws:

• Foreigners can also buy real estate in Vietnam if they have a tourist visa
• There is no limit on the number of properties a foreigner can buy in Vietnam, but they cannot buy more than 250 units in the same condominium.
• Foreigners can purchase up to 30% of the properties in the same condominium project.
• The lease term is 50 years
• If you are married to a Vietnamese, you can have ownership.

Vietnam Land Use Rights (LUR)

Land Use Rights (LUR) in Vietnam can increase the security of foreigners’ investments in Vietnam. Under the Land Use Rights (LUR), you do not own the land, but you have the right to use the land (including land leased or granted by the Vietnamese government). If you lease land, you must obtain a Land Use Rights Certificate (LURC) from the Vietnamese government.

Can foreigners buy property from Vietnamese?

Foreigners usually buy houses from foreign landlords or Vietnamese real estate agencies. Unless the foreign quota is less than 30%, it is not possible to buy a house from a local resident.

Foreign ownership of real estate in Vietnam

If you want to buy real estate in Vietnam, you need to obtain a certificate of ownership through a Vietnamese real estate developer. Due to national security concerns, the government has made it more difficult for foreigners to obtain ownership certificates of their assets since 2017. Under Vietnam's housing decree, foreigners can only own up to 30% of the total number of apartments in a project and are not allowed to own property in a list of special areas reserved for national security. Only the Ministry of National Defense and the Ministry of Public Security have the authority to determine these lists. To know the list of real estate projects available to foreign buyers, you should go to the building department in your area or consult any local qualified consultant.

In Vietnam, land use rights certificates, house ownership certificates and other land-related asset certificates are often referred to as pink books. In other words, a pink book represents your full ownership. Because the cover is pink, it got this name, and the Vietnamese wanted to call it by this name for convenience. The pink book is issued by the Ministry of Natural Resources and Environment and applies to all land in the country. What does the Pink Book include? The Pink Book will have the following uses:

• Used as collateral for bank loans
• You are allowed to use the house for residential and other purposes.
• Enables you to demolish, maintain, renovate or rebuild your home (but you must follow the conditions and procedures of building laws).
• Allows you to rent/sell/mortgage the home or give it to your heirs.

Vietnam Property Buying Process

Buying a house in Vietnam

If you want to buy real estate in Vietnam, you need to obtain a certificate of ownership through a Vietnamese real estate developer.

• You can pay with cash assets or loans
• Some sellers will allow installment payments
• All transactions are in Vietnamese Dong (VND)

Why do you want to buy a property in Vietnam?

Ask yourself what to expect when investing in Vietnam.

Areas in Hanoi and Ho Chi Minh City are the most popular choices for investors. They attract many foreign companies, expatriates and locals.

If you prefer a seaside resort, Danang, Vung Tau, Quang Ninh, Phu Quoc and Nha Trang are suitable. Especially in Da Nang City, housing prices have skyrocketed in recent years.

If you are looking to get high rents or sell out, it is best to buy a property in Ho Chi Minh City.

How to choose a real estate agency?

Finding a high-quality Vietnamese real estate agency to buy a house is safe and convenient for foreigners. BEYOND360 Vietnam Real Estate Excellence is a reputable company. Please contact us and we will give you peace of mind and assurance when buying a house.

How to buy a pre-sale house?

Once you’ve found a property you like, it’s time to book it. Usually you need to pay a deposit of VND50 million to VND100 million (approximately US$2,100 to US$4,500). This fee is only for reservations until the date of sale and is refundable at any time.

For example, if your reservation number is 57, at the launch ceremony, the other 56 people will be given priority to pre-select the property to purchase, then it will be your turn, and if you decide not to purchase the property, you can get your reservation amount back.

Pay and sign the deposit contract

At the launch event, if you decide to purchase the property, the reservation amount will be converted into a non-refundable deposit.

When you sign the option to enter into the deposit contract agreement, please pay your deposit via credit card or bank wire transfer.

Pay the first installment and enter the deposit contract

Typically, you have 14 days from the time you pay your initial deposit to pay your down payment.

By making the first payment, you agree to enter into the "Deposit Contract". It will not be transferable after that.

Pay the following instalments as per schedule

You and the seller should agree on all key points of the contract before signing it. You will then make payments in installments as specified in the terms of your contract.

Sale and Purchase Agreement (SPA)

Once foreign ownership is confirmed, you should draft and execute a SPA, which can later be transferred.

Property Handover

Before purchasing a property, you must pay a maintenance fee equal to 2% of the purchase value. In addition to the maintenance fee, you will also need to pay one year's management and operation fees, registration costs (0.5%), and instalments when they are due. Some developers may waive administration fees for the first few years of certain promotions.

Ready to award the pink book

Once you have signed the SPA, you can apply for document submission to receive the Pink Book. If you buy a home from a qualified developer, they will do it for you.

Final Payment

Your final payment is usually due within 14 days of receiving notification of receipt of the Pink Book.

How to remit funds for buying a house to Vietnam

Open a local bank account (it is recommended to open a local branch of an international bank such as Standard Chartered, Citibank, etc.) Transfer money in USD, EUR or any convertible currency from your bank account overseas to your bank account in Vietnam, and then transfer to the seller's bank account in Vietnamese Dong (the bank will automatically convert your currency to Vietnamese Dong at the current exchange rate).

*Note: By law, you must verify cash value over USD 5,000 when entering or leaving Vietnam. However, the authorities don't usually check the money you bring into Vietnam, but the money you bring out of Vietnam.

Can foreigners use real estate as collateral for mortgage in Vietnam?

It is very challenging for foreigners to obtain a mortgage in Vietnam. To a limited extent, you may need the help of branches of the likes of HSBC, OCBC, Standard Chartered or other international banks in Vietnam to get property loans which are easier to obtain compared to local banks. If a foreigner marries a Vietnamese, he/she will be able to get a 15-year loan for up to 4/5 of the property value from OBC. However, you will have to provide some collateral to prove you can afford the mortgage. Communicate with some banks in Vietnam to find out how they can help you. To ensure you get the best loan, you should check interest rates, amortization requirements, and other issues.

VAT (Value Added Tax)

The VAT is 10% when it comes to apartments purchased on the primary market.

Maintenance Fee

In all cases, the buyer must pay a maintenance fee of 2% of the purchase price.

Registration Fees

Buyers are required to pay a registration fee of 0.5% of the Pink Book value.

Rental income tax

Compared with other countries in Asia, Vietnam has high fixed rental income tax. If you buy real estate for leasing, you will not only need to pay 5% VAT, but also 5% personal income tax. To sum up, you have to pay 10% of your rental income. Contact BEYOND360 to learn more about rental-related information.

Capital Gains Tax

Even though there is no capital gains tax in theory, you still have to pay 2% personal income tax when you sell your property.

Local taxes

Expats can hardly buy land, but as far as you know, the tax range is 0.03 to 0.15%. If necessary, ask your attorney how to resolve your tax problems.