Oi’s legal columnists Hadrien Wolff and Marijn Sprokkereef explain what the new real estate law means for foreigners…
Dear Hadrien and Marijn,
I’m an expat who’s been living here for the last seven years. My wife is Vietnamese-American, born in Vietnam but moved to the US at the age of five. As we find our life in Vietnam very comfortable, it has been our long- cherished dream to purchase a house in Ho Chi Minh City and to settle down. The fact that foreigners were, at least until recently, not allowed to buy real estate in Vietnam has unfortunately discouraged us from pursuing our plans. We’ve recently heard about a new law and are very curious to hear from you whether anything will change for our situation.
We can totally imagine that you and your wife enjoy living in Vietnam and you are absolutely right to raise a question about the new Law on Housing – a hot topic now.
Under the current legal regime, unless you are a Vietnamese citizen living in Vietnam, it is indeed very difficult, often even impossible, to own residential property here. The new Law on Housing, which was approved by the National Assembly on November 25, 2014, is both intended and expected to open up Vietnam’s real estate market to foreign investment.
Among several other changes, what is most relevant to your situation is that the new law will broaden the opportunities for two categories of individuals to own residential property in Vietnam: foreigners and so-called “overseas Vietnamese.”
To start with the latter category, “overseas Vietnamese” include Vietnamese citizens and persons of Vietnamese origin who are permanently living and residing overseas but who no longer hold Vietnamese citizenship. Under the new law, effective July 1, 2015, people in this category will be entitled to own apartments and houses. Ownership may be realized through purchase, purchase-lease, by way of gift or inheritance, and through the transfer of land use rights in specified housing projects.
Apart from foreign investors who are active in housing development projects in Vietnam, under the new law all other foreigners who are legally allowed to enter into Vietnam will be entitled to residential housing ownership. Foreign individuals may acquire ownership of residential housing through purchase, purchase-lease, and by way of gift or inheritance.
Not surprisingly, some conditions will apply to the above. For example, the new law will put a cap on the foreign ownership of residential housing. With regard to apartments, the number of apartments under foreign ownership must not exceed 30 percent of the total number of apartments in one apartment building, whereas the number of houses owned by foreigners must not exceed 250 residential houses in a “ward” (that is a term used in Vietnam for an urban sub-district).
Another issue to keep in mind is that the duration of foreign ownership, which shall be agreed by the parties in the contract, will be limited to an extendable period of 50 years from the date of issuance of the ownership certificate. However, here is some good news for you: when you are married to a Vietnamese citizen or an overseas Vietnamese, under the new law you will be entitled to long-term ownership and you will have the same ownership rights as a Vietnamese citizen.
As is often the case, it may take some time before the government will issue further legislation to implement the new law. So to answer your question, we recommend you keep an eye on the latest developments. These are very interesting times to consider buying property in Vietnam and we wish you and your wife all the best in realizing your dreams!
Every month, Hadrien and Marijn answer legal questions from Oi readers. If you have any legal question you want answered, send them to [email protected]