Although not being allowed to own land in Vietnam in accordance with the Land Law, foreign organizations and individuals (hereinafter referred to as foreign entities) can legally own properties attached to it.
In this article, we would like to present the legal basis and procedures for foreign entities to buy and own residential houses in Vietnam.
Legal basis:
First of all, pursuant to Clause 3, Article 7 of the Housing Law of 2014, foreign entities who satisfy the conditions under Clause 1 Article 159 of this law shall have the right to own house in Vietnam, specifically:
- Foreign entities who invest in project-based housing construction in Vietnam presented by the Investment Registration Certificates (IRC) and having houses built in the project;
- Foreign-invested enterprises, branches, representative offices of foreign enterprises, foreign-invested funds and branches of foreign banks operating in Vietnam presented by IRC or other documents related to the permission to operate in Vietnam;
- Foreign individuals who are allowed to enter Vietnam and are not granted diplomatic immunity and privileges as prescribed under Clause 1 Article 74 of Decree No. 99/2015/ND-CP.
Besides, according to Clause 2 Article 159 of the Housing Law, foreign entities should be aware of the legal forms of home ownership for foreigners, particularly:
- Invest in project-based housing construction in Vietnam;
- Buy, rent and purchase, receive, or inherit commercial houses including apartments and separate houses in the projects for housing construction, except for areas under management relating to national defense and security as prescribed in regulations of the Government.
An important note for this form is that foreigners can only buy, rent and purchase, receive or inherit no more than 30% of of apartments in an apartment building or no more than 250 houses regarding separate houses including villas, row houses and detached houses in an area whose population is equivalent to a ward-administrative division[1]. The duration of home ownership for a foreign individual is 50 years and can be extended up to 50 years since the expiration date of the first-time ownership duration. Meanwhile, for a foreign organization, the duration of ownership is no longer than that written in the investment registration certificate of the organization, including extension itself[2].
If a foreign individual is married to a Vietnamese citizen, he/she, in a stable and long period of time, may own a house and fully has rights relating to the house like Vietnamese such as renting, giving, donating, inheriting,[3] ….
Procedures for buying houses in Vietnam:
To obtain the certificate of home ownership in Vietnam, the following documents need preparing:
1. An application for a certificate of home ownership and land use right written in Vietnamese and English in prescribed form.
2. Documents of the seller’s home ownership rights:
a) In case of buying apartments in commercial housing development projects of real estate business enterprises (including cases of buying apartments built in the future and available apartments)
- Decision on approving commercial housing development projects of competent authorities;
- Land lease contract or land allocation decision or land use right certificate issued by the competent authority to the enterprise;
- A drawing of the plan of the apartment for sale;
- The handover minutes of the apartment attached with the regulations on management of apartment use issued by the enterprise (applicable to the purchase of available apartments).
b) In case of buying, receiving inheritance, receiving gifts for apartments in commercial housing development projects of individual (apartments available)
- Certificate of house ownership and land use rights in accordance with the Housing Law and Decree No. 60/ ND- CP dated 5/7/1994 on housing ownership and land use rights in urban areas, market or certificate of house ownership under Decree No. 95/2005/ ND-CP dated 15/7/2005 on granting house ownership certificates and construction works ownership;
- Certificate of land use right with house recognition on the land granted in accordance with the Land Law 2003.
3. Original contract of sale, purchase, donation of houses or papers on house inheritance in accordance with Vietnamese law.
4. A certified copy of a foreign passport and one of the prescribed documents.
5. The certificate of the real estate trading floor about the apartment has been traded on the floor in accordance with the law on real estate business, if buying an apartment of a real estate business.
6. Tax and registration fee receipts according to law provisions.
Fees and taxes obligations
When buying and owning houses in Vietnam, foreigners are subject to the same budget remittances, taxes, fees and charges as Vietnamese, including:
- Land use fees;
- Value added tax (VAT): 10% of the selling price.
- There are also other fees such as: cadastral mapping and administrative fee services, measurement fees, etc.
Registration, cadastral mapping and administrative and apartment measurement fees are often included in the contract, which requires the parties to incur the procedures for granting ownership certificates.
If you have any questions or require any additional information, please contact Apolat Legal – An International Law Firm in Viet Nam.
This article is for general information only and is not a substitute for legal advice.
[1] Clause 3 and 4 Article 76 of Decree No. 99/2015/ND-CP
[2] Points c) and d), Clauses 1, Article 161 of Housing Law of 2014
[3] Paragraph 2, Point c), Clause 1, Article 161 of Housing Law of 2014
