Complete Guidance for Foreigners to Buy Property in Vietnam 2020

Updated: 4 days ago

There is a common misconception that foreign citizens or companies can not own property in Vietnam. However, it is completely possible. But there are specific conditions that you have to know before buying properties in Vietnam as a foreigner.

We have gathered all necessary information in this guide to clarify the possible ways for a foreign investor to acquire assets in Vietnam.


* Can foreigners buy property in Vietnam?
* Can foreigners buy land in Vietnam?
* Vietnam’s new law to foreign ownership of property
* Vietnam’s Land Use Rights (LUR)
* Can foreigners buy property from Vietnamese people?
* Vietnam real estate foreign ownership
* The Pink Book
* The process for buying property in Vietnam
* Transferring money to Vietnam when buying properties
* Foreigner to mortgage a property in Vietnam for a loan
* Related taxes & fees
* The best places to buy property in Vietnam
* Can foreigners rent out a property in Vietnam?
* Can Chinese people buy property in Vietnam?
* Final Issues on Buying Real Estate in Vietnam

Can foreigners buy property in Vietnam?


Until a few years ago, the Vietnamese government still restricted foreign ownership by their laws. The cap was limited to one unit in a condominium. Therefore, at that time, there were not many foreigners who could invest in Vietnam real estate market.

Nonetheless, since July 2015, thanks to the Vietnamese Law on Residential Housing (LRH), foreigners can buy property in Vietnam at ease.

In other words, you can buy as many properties as you want, as long as you have enough money. This can be considered as a revolution in the regulations of foreign ownership.


Can foreigners buy land in Vietnam?


Like in most Southeast Asian countries, expats can not buy and own any land. As regulated in the constitution, the land is of collective proprietorship by all Vietnamese and governed by the state.


As regulated in the national Land Law, foreign organizations and individuals are able to rent land. Commonly, the validity of the lease can be up to 50 years. However, in exceptional cases, it can be up to 70 years and can even increase to 99 years in 2020.


Even if the stipulations are becoming more and more comfortable, and likely to loosen up in the future, it is still necessary for you to be cautious. For example, there is nothing to guarantee that you can always refresh your rent time.


Vietnam’s new law to foreign ownership of property


'Foreigners who are allowed to enter Vietnam' means anyone who legally enter Vietnam for any purpose.


The most important things you need to know about the new foreign ownership of property law are as follows:


  • If an expat has a tourist visa, he can buy a property.

  • You can buy an unlimited number of real estate in the country. But at the time being, a foreigner can not buy more than 250 houses in one ward.

  • Expats can buy up to 30% of the units in condominiums and can possess a maximum proportion of 10% of the properties in a project.

  • The 50-year leasehold period is now renewable.

  • If you marry a Vietnamese, you can get free ownership.


Vietnam’s Land Use Rights (LUR)


Fortunately, the Land Use Rights (LUR) can increase the safety for foreign investment in Vietnam.


As regulated in the LUR, you have no proprietorship on lands but the right to use the land (including the land rented or endowed by the Vietnamese government).


Nevertheless, you will have to assign your Land Use Rights Certificate (LURC) to the Vietnamese government if you want to lease your land.


Can foreigners buy property from Vietnamese people?


Usually, foreigners will purchase real estates from former foreign landlords or dealers on the primary market.


That is because there is a significant limit on the secondary market. Unless the foreign quota is less than 30%, you will not be able to buy property from local citizens.


Vietnam real estate foreign ownership


It’s necessary for you to get a certificate of proprietorship if you want to purchase an estate from a property developer.


Due to the protection of national defense and security, since 2017, the government has made it harder for foreigners to receive their property ownership certificates.


According to a decree on Vietnam’s housing laws, expats can only possess up to 30% of total apartment units in a project and are not allowed to own property in the checklists of special areas reserved for national defense and security.


Only the Ministry of National Defense and the Ministry of Public Security have the authority to determine those lists. To know about the list of housing projects available to foreign buyers, you should go to the department of construction in your area or check with any local competent consultant.


Ensure that you can totally possess your prospective property and get the ownership certificate as a foreigner before making any purchase.


The Pink Book



In Vietnam, the certificate of land use rights, ownership of houses, and other assets attached to land is commonly called the pink book. In other words, a pink book expresses your full proprietorship.


It has that name due to the pink color of its cover, and Vietnamese want to call it in that name for convenience.


Issued by the Ministry of Natural Resources and Environment, the pink book is valid to all kinds of land all over the country.


What does the pink book include?


The pink book will have the following uses:

  • Function as collateral for bank loans

  • Allow you to utilize your house for residential and any other purposes.

  • Enable you to dismantle, maintain, renovate, or rebuild your house (but you must obey the conditions and procedures of laws on construction).

  • Let you lease/sell/mortgage the house or give it to an heir.


The process for buying property in Vietnam


Before deciding to invest in Vietnam, you should understand the buying process thoroughly. No one wants to meet any unexpected additional fees that may appear later.


Below is a list of crucial things you should notice during the buying process.


1. Paying for a property in Vietnam

  • You can pay with cash assets, housing mortgage, or both of them.

  • Some sellers will allow installment with different interest rate.

  • Nowadays, transactions ordinarily utilize VND (Vietnamese Dong), and the US Dollar is invalid.

Example of an usual payment method for an apartment project in District 2, Ho Chi Minh City, Vietnam below:


2. Why do you plan to buy?

Ask yourself what you are looking forward to when investing in Vietnam.

Central areas in Ha Noi and Ho Chi Minh City is the best choice for anyone who is looking for high appreciation. They are appealing to many foreign corporations, expats, and local people.

If you like a beachside resort, Da Nang, Ba Ria Vung Tau, Quang Ninh, Phu Quoc and Nha Trang are more suitable. Especially in Da Nang City, the housing prices have skyrocketed in recent years.

If you keen to high rental or trading profits, you had better purchase a range of units in places in Ho Chi Minh City.


3. Hiring a property lawyer in Vietnam (optional)


We suggest you should consult a solicitor for significant transactions as there may be still some difficulties blocking your way.


However, expats will hardly need a lawyer when buying apartments on the primary market. You can find not only foreign but also reputable local developers. Commonly, your property developer or agent will include a property lawyer when necessary.


4. Booking a property/apartment


Once your agent has helped you to find out your favorite property, it’s time for you to make a booking for this. Normally it will fall between VND 50 million and VND 100 million (about USD 2,100 to USD 4,500). This fee is for reservation purpose until the date of sale opening ceremony, this amount is refundable at anytime.


For example, your booking reservation number is 87th, on the sale opening ceremony, after 86 others will be given priority to pre-select a property to buy, then it will be your turn, if you decide not to buy that property, you can take back the booking money amount.


5. Pay and sign the Deposit Contract


At the Sale Opening Ceremony, If you decide to buy the property, the booking amount will be converted into a deposit and non-refundable.


When you sign the Option to enter the Deposit Contract Agreement, pay your deposit by credit card or bank telegraphic transfer.


6. Pay the first installment & enter Deposit Contract

Usually, within 14 days since paying your first deposit, you must pay your installment for the first time.

By paying the first installment, you have agreed to enter the Deposit Contract. Later, it will not be transferable.


7. Pay the following installments per schedule

You and the seller should agree on all points in the contract before signing. Then, you will pay the following installments as specified in the contract terms.

Example of a payment schedule for an apartment project in Ho Chi Minh City, Vietnam:


8. Sales & Purchase Agreement (SPA)

After your foreign ownership eligibility confirmation, you should draft and execute your SPA, and it shall be transferable later.


9. Handover of the unit

You will have to pay the maintenance fee equivalent to 2% of the purchase value before you can acquire your property. Apart from the maintenance fee, you need to pay one year of management and operation fees, the registration cost (0.5%), and the due installment. Some developers may waive the management fees of some first years as a sales promotion.


10. Preparation for granting the pink book

Once you have signed the SPA and controlled your financial duties, it is time to submit your documents together with the application to receive the pink book. If you buy from an eligible developer, they will do this for you.



11. Final payment

Make your last pay within usually 14 days since you receive the notification of getting the pink book.


Transferring money to Vietnam when buying properties



  • Create a local bank account (We suggest Vietinbank, BIDV, or Vietcombank). You should call or send them an email in advance to see what they can offer you and to answer your questions.

  • Or create a bank account in a branch of your home banks or international banks in Vietnam.

  • Transfer your money in USD, Euro, or any convertible money from your bank account in overseas to your bank account in Vietnam and then transfer to the seller’s bank account in Vietnamese Dong (the bank wil automatically convert your currency to Vietnam Dong at the current exchange rate).

* Notice: In accordance with the law, you will have to verify any cash values that are over USD 5.000 when coming or leaving Vietnam. However, the authority does not usually check your money coming into Vietnam, but out of Vietnam.


Foreigner to mortgage a property in Vietnam for a loan


It is quite challenging for a foreigner to get mortgages in Vietnam. As limited, you may need help from banks such as HSBC, OCB, or Standard Chartered or other int'l banks' braches in Vietnam to get property loans easier than with a local bank. If an expat has married to a Vietnamese, he/she will be able to get a 15-year loan taking up to 4/5 of the property value from OBC. However, you will have to provide some collaterals as proof of affordability to get a mortgage. Communicate with a few banks in Vietnam to find out how they can help you. To ensure that you will get the best loan, you should check the interest rate, amortization requirements and other issues.


Related taxes & fees


VAT ( Value Added Tax)

The VAT is 10% when it comes to purchasing an apartment on the primary market.


Maintenance fee

In all case, buyers will have to pay a maintenance fee of 2% of the purchase value.


Registration fee

The buyer needs to pay a registration fee of 0.5% of the property value for pink book.


Rental income tax

Vietnam has a high flat rental income tax in comparison with other countries in Asia. If you buy properties to lease, you will have to pay not only a 5% VAT but also a 5% personal income tax. To sum up, you must pay 10% of your rental incomes.


Capital gains tax

Even if there is no capital gains tax theoretically, you will still have to pay a personal income tax of 2% when selling your property.


Land tax

Expats can hardly purchase land, however for your information, the taxation is from 0.03 to 0.15%.


Ask your solicitor or agent about how to solve the tax payments if necessary.


The best places to buy property in Vietnam


Ho Chi Minh City (HCMC or Saigon)


It's the most dynamic & largest city in Vietnam and the business hub of the country. The actual population of the city is more than 10m. According to an official report of HCMC authority, the population of the city is increased by more than 300,000 people a year by births or people moving to the city from other cities or provinces or other countries. The city currently has more than 0.5m expats from all over the world and more foreigners are now choosing the city as their place for education, business and living because of its excellent atmosphere, pleasant people, safety.


The housing and living costs in HCMC is also currently much lower than other neighbor cities of Asia e.g Bangkok, Kuala Lumpur, Singapore, Hongkong, ...


As the Vietnam Govt. controls well the Covid-19 pandemic and the conflict between the West and China, more foreigners and international corporations select to move the business to Vietnam with offices in HCMC.

(HCMC)


Hanoi


Hanoi is the capital of Vietnam and the 2nd largest city of the country. Hanoi is about 60% of HCMC in term of population, economy scale.

(Wesk lake of Hanoi)


Can foreigners rent out a property in Vietnam?


At present, Vietnamese government puts no particular restriction on expats to rent out a property. Nonetheless, you should inform the housing authority in your area firstly before renting out your property (your agent / broker can help this). To find lodgers and draft a tenant contract, you may need the help of an estate agent. Your lodgers should pay you a sum of the deposit equivalent to about one to three months of rental cost (so it will be two months on average) in advance. You can keep that sum of money if they leave the houses before the contracted time.


Can Chinese people buy property in Vietnam?

(nine-dash-line Chinese passport)


Chinese people as well as other foreigners can buy real estate in Vietnam. However, for “nine-dash line” Chinese passport holders, they will not be able to buy property in Vietnam because of some reasons for sovereignty and politics.


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Final Issues on Buying Real Estate in Vietnam


How can you settle in Vietnam?


Although Vietnam government offers no retirement visa or investor visa like Malaysia and Thailand, it is still possible for you to stay on a long-term tourist visa or work permit visa. Getting a Vietnamese nationality may be a good idea if you can. Still, an excellent selection can be using your units as a way to earn rental incomes and capital investment gains.


Cost of living in Vietnam?

The necessary sum of money to live is variable, but an average foreigner can spend from $800 to $1.200 per month for a comparatively good living standard. With that sum of money, you can enjoy fresh food, comfortable accommodation, medium restaurants, pubs and bars, fitness centers. However, if you have to take care of your whole family of 4-6 people, you may need more money. Or living in a more economical way such as less hanging out or living in small town is also a good idea. Or if you love to enjoy luxurious places, you will have to spend more money to live comfortably in big cities like Ha Noi and Ho Chi Minh City. In general, I can say that living in Vietnam is remarkably cheap compared to other countries in the region and the world.


Is Vietnam a good place to retire?

Yes, of course. Low living expenses, delicious and fresh dishes, beautiful climate and excellent people, .... As there is no retirement visa, you can register for Vietnamese nationality or tourist visa.


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How high are property prices Vietnam?

Fortunately, Vietnamese property is among the cheapest in Asia. The average price of apartment is ound USD 2.300 per square meter in the city center districts. Districts 1, 3, 5 could be more expensive. Meanwhile, property in suburban districts is around USD 1.100 per square meter. If you want to save more money, you can invest in uncompleted or future projects. They can save you nearly half of the total investment. However, it can be risky to pour much money in such projects, so I recommend you consult your solicitor or try to find reputable contractors. If you seek for cheap property in big cities such as Ha Noi, Da Nang, Nha Trang, there are apartments which cost from USD 40.000 to 100.000 per unit.


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Final Words on Buying Property in Vietnam


There're many fake news generated by cheating brokers, agents or developers. You need to find reliable and trusted developers or consultants for your investments.


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