According to the Housing Law, the foreigners can buy and own the property in Vietnam. However, they have to know well about the regulations. These are 7 tips for them to consider carefully.
First, the buyer must be qualified under the applicable laws. According to the Housing Law, the condition is now so relaxed that a foreigner who lawfully enters Vietnam can be eligible to own residential housing. As such, the buyer needs to prove that his entrance is legally permitted.
Second, he should keep a track record for the money he brings to Vietnam for buying the house. This would make it easier for the buyer to remit the money back after selling the house at a later date. For this purpose, he should open an account at a bank in Vietnam to which the money will be transferred, and from which the payments for the house should be made. In case the money is his salary or income earned from working or doing business in Vietnam, he should keep documents that track his/her income.
Third, the buyer should get to know which property projects that he or she is permitted or not permitted to buy in order to avoid future risks. Please note that foreign buyers are only permitted to buy houses from new housing development projects, not in existing residential quarters. This job is not difficult for foreign buyers if he or she consults with a reputable property agent.
Fourth, foreigners should make sure that the property developers they are contracted with are qualified to sign housing sale and purchase agreements with buyers. In principle, the property developers are allowed to enter into housing sale and purchase agreements once (i) the housing project is properly approved; (ii) the foundation work of the house is completed, and (iii) the terms and conditions of the agreement for selling a condo have been registered at the Vietnam Competition Authority (under the Ministry of Trade and Industry). An agreement may be void if failing to meet one of these conditions, and thus, the interests of the buyer may not be properly protected.
Fifth, buyers should pay careful attention to the implementation of a housing sale agreement with housing development projects, since this may be not similar to the transaction practice in his native country. He should seek advice from lawyers to avoid risks.
Sixth, according to the Housing Law, foreign housing owners have the same full rights as Vietnamese over the house, such as leasing, donation, a capital contribution, etc. However, it should be noted that the foreign owner can exercise these rights only after he or she has obtained a “land use right certificate and/or property ownership” for the real estate. Therefore, in the respective contract, the obligation to apply for the certificate of ownership and/or the land use rights by the seller should be clearly stipulated. Also, when leasing the real estate, the foreigner owners must register the lease agreements with the local government (district-level administration committees), and properly declare his/her income tax for the earned rents. By complying with these requirements, the foreign buyers’ incomes will be treated as legitimate income which can be remitted abroad. In addition, when renting out a house, it is also required that the owners must register the temporary residence of tenants with relevant local authorities.
Seventh, if the foreign owners no longer want to own the house, what can they do? They can sell it. However, currently there is no clear guidance from the State Bank of Vietnam on how foreign owners can remit the sale proceeds from selling the house. Again, to navigate through such procedures, buyers should consult with a lawyer specializing in real estate.