Foreigners’ Guide to Buying a Property in Vietnam

November 16, 2018

Vietnam Property Guide: Can Foreigners Own a Property in Vietnam? Yes, But…

Technically, nobody can own a land in Vietnam because it is collectively owned by the Vietnamese people and is further governed by the State. But that does not mean that foreigners cannot live here.

Since the land is not for sale, what you can do is to get rights to use the land in Vietnam. This will give you the chance to own the property built on that land. Not sure why you should have a Vietnam property investment? Read why Vietnam is emerging as an advantageous property investment.

Property Ownership

Vietnam property guide | Yazhou Property
Hanoi skyline cityscape. An aerial view of Cau Giay park, west of Hanoi.

The closest you could get to own a property in Vietnam is acquiring the Land Use Rights Certificate (LURC). With this, you can own any type of residential properties including condominiums or landed homes such as villas and houses.

For foreigners, there are still quota restrictions in buying properties. For instance, foreigners can own:

  • Not more than 30% of the total units within a condominium complex
  • Not more than 10% of the total number of separate houses in a single project.

Basically, you will be “renting” the land where your property will be standing, thus giving you a leasehold type of ownership. Each foreign individual will be subject to 50 years of leasehold starting from the acquisition of the ownership certificate. Take note that this leasehold can possibly be renewed, but is first subject to a review by the authorities.

If you are a foreigner married to a Vietnamese, you will be granted a freehold ownership of the property.

The process of Buying a Property

Here’s a list of what you need to accomplish to get a property in Vietnam according to KPMG:

  1. Open a Bank Account
  • You will need to have a bank account set up in Vietnam. With this, you will also need a notarised passport translated to Vietnamese.
  1. Inward Remittances
  • Documentation to support the source of funds or the purpose of transfer may be required.
  1. Purchase of Properties
  • Payment must be made through a licensed credit institution (a bank) in Vietnam.
  1. LURC Acquisition
  • To obtain a LURC, a certificate for land use rights and the ownership of the property should be present.
  1. Extension of Property Ownership
  • Foreigners should renew their property ownership three months before the property ownership expires. Foreigners will only have a one-time extension (not more than 50 years)
  1. Sale/Lease of Properties
  • Foreigners can definitely lease or sell their properties. But before that, they must inform the provincial house management agency.
  1. Outward Transfer
  • When transferring properties, the purpose of the transfer is required. Additional documents needed are purchasing contract, property ownership, other relevant documents

Taxes to be Wary Of

Taxes when buying property

  1. VAT
  • 10% VAT based on the transfer price of the house. No VAT shall be implemented for the transfer of land use right.
  1. Registration fee (Stamp Duty)
  • Payable when buyers receive their Certificate of Ownership.
  • Price for registration fee calculation issued by Provincial People’s Committee * land/house area * 0.5%.
  • The maximum fee is VND500 million/asset/transaction.

Taxes when selling property

  1. Personal Income Tax (PIT) – 2% of the transaction of value
  1. VAT
  • Individuals without registered business activities are not required to declare and pay VAT when selling assets.

When renting out property

Vietnam tax for residents

  1. Business license tax
  • VND 1m per year for rental income is equal or more than VND 1.5m/month.
  1. VAT
  • Not applied if rental income is or less than VND 100m/year.
  • VAT = total rental income * 5%.
  1. PIT for renting
  • Not applied if rental income is or less than VND 100m/year.
  • PIT = total rental income * 5%

Non-Vietnam tax residents

  1. No clear specific rules and regulations
  2. May likely be taxed like a resident individual lessor.

*Tax regulations are subject to change by relevant authorities.

Ready to Buy?

Excited to dive in the Vietnam property market? We provided this Vietnam property guide to help you in your next Vietnam property investment. But do not to forget to invest in a good Vietnam property consultant and a lawyer. It’s always best to be well-prepared especially if you don’t have a good grasp of Vietnamese policies.

Vietnam property guide | Yazhou Property
Landed houses at Mui Ne, Vietnam.

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