FOREIGN OWNERSHIP – Q/A from the 1st of July 2015

CAN FOREIGNERS OWN PROPERTY IN VIETNAM?
No. Question
Answer
1
Prior to the 1st of July 2015, only the following are allowed to
owner property in Vietnam:
Can foreigners own property in
Vietnam?
1. Foreign company set up in Vietnam (but not real estate
developers),
2. Foreign company owners, managers working in Vietnam,
3. Foreign Individuals with significant contribution to Vietnam,
4. Foreign Individuals with special skills demanded by
Vietnam
5. Foreign Individuals married to a Vietnamese citizen.
As of the 1st of July 2015, foreigners will be allowed to own
residential property in Vietnam.
2
What are the requirements in being
eligible to foreign ownership in
Vietnam?
Hard to answer, the law states that all that is required is to
enter Vietnam legally. There is no further information at the
moment in regards to buying as an investment and not
residing in Vietnam.
Does the buyer need to reside in
Vietnam?
3
4
5
Can I put a deposit on a property now Yes or no, it will really depend on the sellers decision to
and proceed to the purchase from the accept to wait until July, although as we are getting closer
1st of July ?
to it, it has become a more feasible possibility. Most sellers
will accept. BUT as uncertainty of new law, there is a risk..
.
I am married to a Vietnamese Citizen Under the law in Vietnam, the property of a married buyer
does it mean we need to have the
will be shared with the spouse by default unless the
property on both names?
spouse declares to withdraw the ownership rights through
a notary office.
Is there a limit on the number of
properties a foreigner can own?
Before 1st July 2015, an eligible foreigner can buy only
one condominium in Vietnam.
With effect from 1st July 2015, an eligible foreigner can
buy as many as 30% of the total units in one condominium
complex, or 250 landed properties units in one particular
administrative (or the equivalent of) ward / district.
6
Is there a limit to the size of land /
property purchase?
There is no such limit, well at least not yet stated.
7
What are the terms of purchase?
Leasehold or freehold?
Before 1st July 2015, the tenure allowed for eligible
foreign purchaser to a limited 50 years leasehold from the
date of the purchaser’s Certification of House Ownership
and Land Use Right (Red/Pink Book) without option to
renew upon expiry.
From the 1st July 2015, the tenure allowed for eligible
foreign purchaser is limited to 50 years from the date of the
purchaser’s Certification of House Ownership and Land
Use Right (Red/ Pink Book) with renewal possibility. For
foreigners married to Vietnamese citizens, freehold tenure
is granted.
8
What happens after 50 years
ownership?
Before 1st July 2015:
12 months upon expiry of ownership duration (max 50
years from the Pink Book’s issuance date), the foreign
purchasers must sell or donate their residential houses.
From 1st July 2015:
Before expiry of ownership duration, the foreigners can
either sell or donate the residential houses or apply for the
tenure renewal. Currently there is no further regulation
clarifying how to renew the tenure.
9
Because the foreign purchaser only
owns the property for 50 years, is
there any difference in purchase
price and the right of sub-sale
between local and foreigner?
There is no difference in the purchase price between a
local and foreign purchaser.
There is no restriction on subsequent selling by the
foreigners. The foreigner is entitled to sell its property in
the open market and to either locals or foreigners. The
difference is that if sold to a local, the title of the property
will revert to a freehold status.
10
What are the taxes and fees that
have to be paid for purchase of
property?
Based on the current regulations, all purchasers (locals
and foreigners) are required to pay only the following taxes
and fees:
1. 2% for the seller
2. 0.5% for the buyer
3. Notary fees and transfer fees.
11
Can I lease the property?
Under new law to be effective from 1st July 2015:
foreign owners will be able to lease their property with prior
written notice sent to authority and they shall be selfresponsible for taxes imposed on such lease. Currently
there is no further guidance on the aforesaid prior written
notice.
12
At what point can I transfer or sale
the property since purchase?
Right after receiving the ownership title, within 45 days
from purchase.
13
If I want to transfer my property to my
Parents / Children / Spouse /
Siblings, what is the procedure, do I
have to pay tax?
Currently, tax laws in Vietnam allow income tax exemption
in transfer between family members and we have not seen
any tax regulation on different treatment for transactions
between foreigners in this case, will need to wait until July
onwards.
14
If I want to transfer my property to my
Relative, what is the procedure, do I
have to pay tax?
Under the tax laws in Vietnam, such transfer shall be
considered as subsale and Personal Income Tax (PIT) is
applicable as follow:
- 2% of the transacted resale value reflected in the
notarised sale contract between existing buyer and new
buyer.
15
Can I resell to another foreigner?
Foreign purchasers can transfer their ownership title to any
Vietnamese or foreigners provided that the foreigners are
entitled to own residential property in Vietnam.
For a transfer to Vietnamese, the tenure shall be
automatically converted to Freehold,
If a transfer is made to foreigner after the red / pink book is
issued, a new tenure of 50 year shall be awarded to the
foreign sub-purchaser upon the issuance of the new red/
pink book.
16
What is the procedure or
documentation process when I resell
to a local Vietnamese?
The purchasers can transfer the ownership title to a third
party according to the normal procedures provided in
prevailing regulation, i.e. Circular 16 as follow:
- The involved parties shall make a document on the
transfer of the ownership title according to the template
provided in Circular 16 and it is certified by a notary public.
- Proof of income tax payment must be submitted to the
relevant authorities to confirm the transfer of the ownership
title.
17
Is there any Capital Gain Tax?
Is there any difference in tax between
local and foreign purchasers?
No, there is no Capital Gain Tax, however, based on the
current law, Personal Income Tax (PIT) or Company
Income Tax (CIT) is applicable.
 2% of the transacted resale value reflected in the
notarised sale contract between existing buyer and new
buyer.
There is no difference in tax for local and foreign
purchasers.
To the best of our knowledge, there shall be new tax
regulations guiding foreign purchasers to purchase in due
course on 1st July 2015.
18
Do I receive a residency status? Visa
exemption or such as owner of a
property in Vietnam?
Unfortunately, there is no preferential treatment for Foreign
owners. The foreign owner if not working in Vietnam will as
far as we are aware apply for 3 month visas and be eligible
to apply for 2-3 extensions.
19
If I passed away, how will the transfer
of my property be handled?
In such event, the property (ies) shall be dealt with in
accordance to the Vietnam law on Inheritance. i.e. testate
succession or intestate succession.
In other words, at this point we are not a position to say
what the outcome would be.
20
If there is argument regarding to the
property, can I bring it to local court?
Yes. According to the Vietnamese laws, all disputes
relating to the real estate located in Vietnam must be
resolved in relevant Court of Vietnam.
These answers below are just for guidance and our own understanding of changes coming on the 1st of July,
we strongly advise to use the services of a lawyer.
For more information feel free to email us at info@hoianhouse.com or phone +84 1262774421.