As one of Southeast Asia’s growing markets, there is no surprise why many real estate foreign investors have set an eye on Vietnamese property. If you are thinking about investing Vietnam, here is a list of frequently ask questions that can educate you about the real estate market.
What does the law states about foreign property ownership?
The current law, effective from July 1st of 2015, states that foreigners who are permitted to enter Vietnam are eligible to buy residential apartments & landed property.
However, the government sets a quota for apartments bought by foreigners as below:
- 30% of the total number of apartments within a project
- 10% of landed villas within a project
In addition, foreign investors will have an ownership tenure of 50 years (renewable).
Do I need to travel to vietnam?
Yes. If you are a first time buyer, in order to be eligible to purchase local property, you need to enter Vietnam at least once (under any type of Visa) and get your passport stamped by the local immigration authorities.
If you decided to purchased a primary (from developer) property in Vietnam, then later on during the purchasing process you will probably have to come back to the country to sign the Sales & Purchasing Agreement at the developer’s office (consult with your developer for the exact date).
If you decided to purchased a secondary (from an individual) property in Vietnam, you will also need to come back later on during the purchasing process for notarial purposes.
Which are the biggest markets in Vietnam?
As a foreign investor you can buy property anywhere in Vietnam, however the biggest markets are Hanoi & Ho Chi Minh City, with some other emerging markets such as Da Nang & Nha Trang.
What other requirements are there to buy property as a foreigner?
On top of being permitted to enter Vietnam (under any type of Visa), you would also need to have a local bank account with enough funds to finance your property. Opening an account is not difficult and requires minimal documentation, in fact, you can open one without having to come to Vietnam (how to open an offshore bank account in Vietnam).
According to the Vietnamese Housing Law, in order to finance your property, all payments must come through your local account in Vietnam. Some popular banks include: Standard Chartered, United Overseas Bank & HSBC.
What Taxes and fees do I need to Pay?
When Purchasing Property
- Value Added Tax: 10% VAT of property price
- Sinking Fund: 2% of property price (before VAT)
When Selling your Property
- Personal Income tax: 2% on the gross transaction value.
When Renting your Property
- Personal Income Tax: 5%
- Value Added Tax: 5%
- Business license: Subjected to Yearly Rental Income.
Can foreigners buy land in Vietnam?
Foreigners cannot buy and own land, like in many other Southeast Asian countries. Instead, the land is collectively owned by all Vietnamese people, but governed by the state.
Can foreigners get loans from local banks?
Foreigners (residents & non residents) are not allowed to get loans from local banks unless they are married to a local.
How to finance the property?
If you buy property in the primary market (from developer), the developer will have an installment-based payment scheme that you must follow and is according to the construction progress of the project.
If you buy property in the secondary market (from and individual) it will depend on the stage of construction at the time of purchase. If the property is bought before the property is handover then the buyer will inherit the developer’s payment scheme from the seller. If the property is bought after the unit is handover then the buyer will have to pay the total amount to the seller in one go.
Can I sell my property to locals?
Yes. Local buyers will get freehold.
Is my property easy to sell or lease?
In markets like Hanoi & Ho Chi Minh there is a high demand for buying and selling. However it will depend on several factors. Consult your agent to know the market conditions once your property is handover. If the leasing market is strong and the rental yield is big, then leasing out your unit for a while is a good idea. If the leasing market is not good and there is a high demand from buyers, then selling your unit will be the way to go.
How to take money out of vietnam?
From Sales Income:
Through international currency.
Submit required documentation to the bank:
a. SPA with developer
b. SPA with new buyer
c. Tax Receipts
d. Transaction Record*
*the bank should already keep all the transaction records
From Rental Income:
Through international currency.
Submit required documentation to the bank:
a. SPA with developer
b. Rental contract
c. Tax receipts
d. Transaction records*
*the bank should already keep all the transaction records
