With new foreign property ownership laws coming into effect in Vietnam on July 1 as part of the Law on Residential Housing (LRH), the Ministry of Construction has made some proposals under the draft decree providing detailed guidelines on the implementation of the new foreign property ownership laws in Vietnam.
Proposals were issued by the Government at the end of last month and more are expected during this month however detailed below from CBRE Vietnam are the notable proposals from the draft decree on the implementation of new laws that potential foreigner property buyers and investors should be aware of.
Valid passport and visa:
Overseas Vietnamese bearing Vietnamese nationality must possess a valid Vietnamese passport; those holding a foreign passport must produce documents evidencing their Vietnamese nationality under the Nationality Law.
In the case of those with Vietnamese origin, they must possess a foreign passport together with written certification of their Vietnamese origin issued by competent Vietnamese authorities.
For foreign passport holders, these must have immigration stamps from the immigration authority. As far as CBRE understands, these can be visas that are obtained on arrival by many nationalities.
Separate “Red Books” for mini condos:
Individual houses built with two or more floors with designs on each floor, built in the closed style, with floor space from 30 sm upwards, and meet the conditions prescribed by law, shall be issued ownership titles for each apartment in that house.
Extension of ownership term:
Before the expiry of three months of home ownership, foreign individuals need to submit an application dossier to the competent authority for consideration and approval of one additional 50-year extension of the ownership term.
Before expiry, the owner can also sell or donate the house as prescribed by law. The purchasing or receiving party will be allowed for an indefinite term of residence if they are a Vietnamese citizen, or are Vietnamese residing abroad. If not, the house ownership term will be only for the remaining term. When the term expires, house ownership and rights of land use shall be transferred back to the initial owners, then their heir or legal successor of the initial owners or individuals, or the organisations as prescribed by law.
What is not allowed for foreign ownership?
The Ministry of Defence and the Ministry of Public Security have the responsibilities of specifying prohibited areas or areas restricting foreign citizens. These two Ministries will provide written notices to the provincial People’s Committee to direct the Department of Construction to specify each investment project built commercial housing in the province to be sold to foreign individuals and organisations.
The 30% cap for condos and 10% cap for villas and town houses:
Foreign organisations and individual ownership of units in an apartment building may not exceed 30 percent of total units in one apartment building. In the event of an area with a geographical boundary equivalent to ward level, with many apartment buildings for sale or lease purchase, then foreign organisations and individuals may own no more than 30 percent of the total units of each apartment building, and not more than 30 percent of the total units of all the apartment buildings.
For housing projects that have separate houses for sale or lease purchase, the foreign organisations and individuals’ ownership must not exceed 10 percent of the total number of separate houses for each project. In the event of an area with geographical boundary equivalent to ward level with several projects where the number of individual houses is more than 2,500 units, the foreign organisations and individual’s ownership must not exceed 250 units.
Authority’s control over the capped amounts of foreign ownership:
The information on the list of residential project allowed for foreign individuals and organisations to sell, lease and purchase, as well as the number of houses owned by foreign individual and organization that have been granted certificates will be posted on the website of the Department of Construction.
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story based on information supplied by CBRE Vietnam. To contact him about this or other stories email andrew@propertyguru.com.sg
