Can Foreigners Buy Real Estate in Vietnam? A Complete Guide!

With rapid economic growth and political stability, Vietnam offers a favorable environment for foreigners to invest in real estate. Its strategic location in Southeast Asia provides access to global markets, making it a desirable business hub. The expanding middle class and urbanization increase the demand for quality properties, creating opportunities for foreigners to achieve lucrative returns. 

Hence, Mr./Mrs. Foreigners don’t miss out on Vietnam’s potential for real estate investment.

1. INVESTMENT LAWS FOR FOREIGNERS IN VIETNAM

Can Foreigners Buy Real Estate in Vietnam? Yes, but under certain rules. 

According to the Housing Law enacted in 2014 and implemented in 2015, Vietnam has provisions on housing rights for foreigners, in which any foreigner authorized to enter Vietnam has the right to buy a house in Vietnam. The new law allows foreigners to buy and own houses in apartment projects with an ownership percentage not exceeding 30% of the project and 10% of townhouse projects. Thus, Vietnam’s real estate market opened to foreigners apart from land.

Especially, Vietnam currently does not regulate the number of real estate that foreigners can purchase, so foreigners can buy as many properties as they wish.

2. PROPERTY TAXES AND FEES IN VIETNAM WHEN BUYING AND OWNING

Currently, the tax rate for buying a home in Vietnam ranges from the property’s value, which is the lowest tax rate on housing in the region. However, there is one big distinction between purchasing in primary or secondary market that foreigners should keep in mind.

1. Primary Market Taxes and Fees:

• 10% VAT: All units sold directly from the developer for the first time are subject to a 10% VAT tax.
• 2% Maintenance Fee: Investors pay a sinking fund fee of 2% for ongoing maintenance and repairs in projects.

2. Secondary Market Taxes and Fees:

• 2% Sales Tax: Resale units on the secondary market are subject to a 2% sales tax on the final agreed transfer price. Usually paid by the seller, this tax applies to both apartments and villas.
• 0.5% Registration Tax: A fee paid by the buyer to transfer ownership documents/titles from the seller. This tax applies to both apartments and villas.

3. Ongoing Fees During Ownership:

• Monthly Management Fee: It is calculated based on a price per square meter, generally ranging from USD $0.5 to $1.5 per square meter per month and paying to the building management team.

Here is the summary table for all: 

3. IMPORTANT DOCUMENTS FOR OWNERSHIP IN VIETNAM

To buy real estate in Vietnam safely, foreigners should pay attention to the following legal documents:

Pink Book: this is issued by the Ministry of Construction to certify legal ownership of the property or development/construction rights.

Sales and Purchase Agreement (SPA): will be issued temporarily until a pink book is available by the developer to prove the ownership. The SPA is signed after the developer has received a certain amount of payment (normally 30% of the total sales amount) from the buyer. When the homeowner sells the house the name on SPA is changed to its new buyer.

Deposit agreement: this is signed between buyer and seller to guarantee the smooth running of the transaction. The amount can be negotiated by the situation of each transaction, but typically, a deposit agreement is worth 10% of the property’s value.

4. THE PROCESS OF FOREIGNERS BUYING PROPERTIES IN VIETNAM

Step 1: Make your investment direction certain

At present, the real estate segment in Vietnam is highly diversified and suitable for all investment purposes. Be certain about your objective to buy a house in Vietnam, and specify your budget, investment period, area etc. then find experts who consult your investment in the right direction.

Step 2: Find a real estate agency

At LA QUINTA, we have many years’ experience advising many foreign investors on real estate investment in Vietnam. We are committed to helping you find the most suitable property and simplifying all the processes for your Vietnam real estate investment experience.

Step 3: Making a deposit

After selecting a suitable property, investors will proceed to deposit a certain amount for the house. The amount of the deposit will depend on the negotiations of both sellers and buyers.

Step 4: Sign a housing purchase contract and make the payment

After agreeing on all of the terms in the contract, the relevant parties will sign a housing purchase contract. The contract will determine the rights and obligations that the purchaser and the project investor need to follow.