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Everything you need to know is included in our Vietnam Property Pack
Vietnam is a top pick for foreigners who want to invest in real estate. It offers stunning landscapes, a vibrant culture, and welcoming locals.
However, buying property in a foreign country can be complicated, especially with all the laws and regulations involved.
Don't worry! This guide is here to make it easy for foreign buyers to understand how the property market works in Vietnam. We'll cover everything you need to know in a straightforward and simple manner.
Also, for a more in-depth analysis, you can check our property pack for Vietnam.Can you purchase and own a property in Vietnam as a foreigner?
If you are American, we have a dedicated blog post regarding the property buying and owning process in Vietnam for US citizens.
Foreigners looking to invest in real estate in Vietnam will find a unique set of rules and regulations governing their ability to do so.
Understanding these rules is crucial to navigate the real estate market in Vietnam effectively.
Firstly, it's important to know that foreigners cannot own land in Vietnam. Land in Vietnam is collectively owned by all Vietnamese people but is managed and distributed by the state.
As a foreigner, you can, however, own buildings or structures on the land. This is typically done through a leasehold arrangement.
The government allows foreigners to lease land for a maximum of 50 years, with the possibility of renewal upon expiration. This leasehold approach is the closest option to 'ownership' of real estate for foreigners in Vietnam.
Regarding the type of properties you can buy, as a foreigner, you are permitted to purchase apartments in commercial housing projects.
However, there's a limitation on the number of units a foreigner can own in a single apartment building – usually capped at 30% of the total units in the building.
The rules for foreign real estate ownership do not significantly differ based on your country of origin. The regulations are generally uniform for all foreigners, regardless of nationality.
This means that whether you're from the United States, Europe, or any other region, the basic guidelines and restrictions are the same.
Residency in Vietnam is not a prerequisite for buying property. You don't need to live in Vietnam or hold any particular type of visa to make a real estate investment.
However, having a valid visa is essential to enter and stay in the country for any purposes, including real estate transactions.
In terms of governmental authorization, buying property as a foreigner doesn't typically require a specific permit or approval from Vietnamese authorities, beyond the standard legal procedures involved in any real estate transaction.
Regarding minimum investment, there isn't a specified minimum value for foreign investments in Vietnamese real estate. Your investment will primarily depend on the property's market value and your financial capability.
One additional point to keep in mind is that while you can own a building or an apartment, the sale and transfer rights are somewhat restricted compared to those of Vietnamese citizens.
These restrictions can affect the resale value and liquidity of your investment.
Can you become a resident in Vietnam by purchasing and owning a property?
If you're considering purchasing property in Vietnam with the aim of gaining residency, it's important to understand the current rules and regulations regarding this.
Vietnam does not offer a direct residency-through-investment program linked to real estate purchases. This means that simply buying property in Vietnam does not automatically qualify you for residency.
Unlike some other countries that offer "Golden Visa" programs or similar schemes, where substantial investment in real estate can lead to residency or even citizenship, Vietnam's approach to residency and citizenship is distinct and not directly tied to property investment.
However, there are other pathways to residency in Vietnam, although they are not directly linked to real estate investment.
These include options like employment, marriage to a Vietnamese citizen, or long-term business ventures in the country. Each of these paths has its own set of requirements and processes.
For example, obtaining a work permit and a business visa could eventually lead to temporary residency, which could then potentially be extended or converted into permanent residency under certain conditions.
As for the specific details such as minimal investment or the exact requirements, these vary depending on the type of visa or residency permit you are applying for.
For instance, a business investment might require a certain level of capital investment, while a work permit would be based on your employment situation in Vietnam.
The number of people who have gained residency in Vietnam through property investment is, therefore, not applicable since there isn't a direct program for this.
It's important to note that even if you own property in Vietnam, you would still need to follow the standard visa and residency procedures applicable to your situation.
Regarding the length of residency, it varies based on the type of residency granted. Temporary residency permits might be valid for a few years and can be renewed, while permanent residency is more challenging to obtain and is subject to stringent requirements and a longer application process.
Permanent residency in Vietnam does not automatically lead to citizenship. Vietnamese citizenship involves a separate and more complex process, often requiring applicants to demonstrate a strong connection to the country.
Good command of the Vietnamese language, and potentially the renunciation of their original citizenship, as Vietnam does not generally recognize dual citizenship.
Thinking of buying real estate in Vietnam?
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Market indicators
You can find fresh and updated data in our pack of documents related to the real estate market in Vietnam.
Based on the the the GDP per capita indicator, it is apparent that Vietnamese people have become 18.3% richer in the past 5 years.
For real estate investors, there's excellent news on the horizon. The expanding wealth among the population has the potential to create increased demand for real estate, leading to a foreseeable future of rising prices.
The website Numbeo tells us that rental properties in Vietnam offer rental yields between 1.7% and 4.4%.
These values for rental yields can be considered as "moderate", which means they fall within a reasonable range and are neither exceptionally high nor exceptionally low.
To know more, you can also read our dedicated article: is it a good time to buy a property in Vietnam?
The life as an expat
Living as an expat in Vietnam can be a rewarding experience. The country offers a diverse landscape, from the bustling cities of Hanoi and Ho Chi Minh City to the lush tropical jungles of the Mekong Delta. The Vietnamese people are warm and welcoming, and the country boasts a rich culture and history.
The cost of living in Vietnam is relatively low, making it an attractive destination for expats. There are plenty of opportunities for employment, with the most popular sectors being technology, education, hospitality, and tourism. The country also offers a good selection of international schools, which are growing in popularity with expat families.
The country's infrastructure is well developed, with an extensive network of roads and highways connecting the major cities. Public transport is reliable and affordable, and there are plenty of options for getting around. Vietnam also offers some of the best food in the world, with a wide range of dishes from all over the country.
Overall, Vietnam is a great place for expats to live and work. The country is safe and welcoming, with plenty of opportunities for employment and recreation. The cost of living is low, and the infrastructure is well developed. With its rich culture and history, Vietnam is an ideal destination for expats looking for a new home.
What are the best places to buy real estate in Vietnam?
This table summarizes some of the best places to buy a property in Vietnam.
| City / Region | Population | Average Price per sqm (VND) | Strengths |
|---|---|---|---|
| Ho Chi Minh City | ≈ 9 million | 30,000,000 - 100,000,000 | Commercial hub, vibrant culture, business opportunities |
| Hanoi | ≈ 7 million | 20,000,000 - 70,000,000 | Capital city, rich history, cultural heritage, educational institutions |
| Da Nang | ≈ 1 million | 15,000,000 - 50,000,000 | Beautiful beaches, coastal city, growing tourism industry |
| Nha Trang | ≈ 400,000 | 15,000,000 - 40,000,000 | Tropical paradise, beachfront properties, scuba diving |
| Phu Quoc | ≈ 150,000 | 25,000,000 - 60,000,000 | Emerging tourist destination, stunning beaches, resort development |
| Hoi An | ≈ 120,000 | 20,000,000 - 50,000,000 | UNESCO World Heritage site, ancient town, cultural attractions |
| Dalat | ≈ 200,000 | 10,000,000 - 40,000,000 | Mountain retreat, cool climate, natural beauty |
Do you need a lawyer when buying a property in Vietnam?
When purchasing a property in Vietnam, engaging a local lawyer can provide valuable assistance in navigating the legal aspects and ensuring a successful transaction.
One crucial document they can help you with is the Purchase Agreement (Hợp đồng Mua bán), a legally binding contract between the buyer and seller that outlines the terms and conditions of the sale.
The Vietnamese lawyer can also assist with conducting a Property Title Search (Tra Cứu Quyền Sở Hữu Nhà Đất) to verify the property's ownership status and identify any potential legal issues or encumbrances.
Additionally, they can guide you through the process of obtaining necessary permits and approvals, such as approval from the local Land Registration Office or relevant authorities.
They will ensure that all applicable taxes and fees, such as the Property Transfer Tax and Registration Fees, are paid correctly and in compliance with Vietnamese laws and regulations.
What are the risks when buying a property in Vietnam?
We've got an article dedicated to the risks associated with purchasing property in Vietnam.
When buying a property in Vietnam, there are some risks that are not common in other countries.
One risk is the risk of land disputes. In Vietnam, land disputes are common and can lead to significant risks for buyers. In addition, there is a risk of fraud and corruption in the purchase process. The lack of transparency in the real estate market can make it difficult to verify the information provided by the seller, and buyers can be vulnerable to fraudulent activities. Finally, there is a risk of hidden costs associated with the purchase of a property in Vietnam. These costs, such as taxes and fees, can add up quickly and make the purchase more expensive than expected.
Everything you need to know is included in our Vietnam Property Pack
What are the required documents for a real estate transaction in Vietnam?
When buying a property in Vietnam, the following documents are required:
1. A valid passport with a Vietnamese visa;
2. A valid Certificate of Residence;
3. A valid Proof of Funds or a valid bank statement;
4. A valid Certificate of Ownership;
5. A valid Certificate of Ownership Registration;
6. A valid Certificate of Land Use and Construction;
7. A valid Certificate of Land Use and Construction Registration;
8. A valid Deed of Sale and Purchase.
We review each of these documents and tell you how to use them in our property pack for Vietnam.
How can you approach negotiations with individuals from Vietnam?
When engaging in negotiations for the purchase of a property in Vietnam, it is of utmost importance to maintain a courteous and respectful attitude, as this is highly valued in the Vietnamese culture.
Patience is key, as the Vietnamese are known to take their time in order to get to know the buyer better. To ensure a successful negotiation, make sure to be transparent about your budget and the terms of the agreement, and be honest about any potential legal issues that may be present with the property.
Bringing a translator to the negotiation is also recommended in order to ensure effective communication and a clear understanding of the process for all parties involved.
Are mortgages available to foreign nationals in Vietnam?
Foreigners can get property loans in Vietnam, but the eligibility criteria and requirements vary depending on the lender and loan terms.
To secure a property loan in Vietnam as a foreigner, you may need to engage with local banks and financial institutions that offer specific mortgage programs for foreigners, taking into account factors such as visa status, property type, and loan conditions.
In Vietnam, banks that can grant mortgages to foreigners include Vietcombank, BIDV, Techcombank, VPBank, Sacombank, and ACB.
However, it's useful to know that mortgage rates in Vietnam for a 20-year term range between 8% and 12%, making it difficult for borrowers to obtain affordable funds. As a foreigner, you should consider alternative financing options to navigate this situation more effectively.
What are the taxes related to a property transaction in Vietnam?
Here is a breakdown of taxes related to a property transaction in Vietnam.
| Tax | Description | Calculation | Who pays |
|---|---|---|---|
| Rental Income Tax | Tax on rental income generated from the property | 10% on the rental income (5% VAT and 5% Personal Income Tax) | Owner |
| Personal Income Tax (PIT) | A flat rate tax on the resale of a property | 2% of the transaction value of the property | Seller |
| Value Added Tax (VAT) | Tax on the transfer of real estate properties | 5% of property value for social housing and 10% for commercial housing | Buyer |
| Registration Tax | Tax for registering the property transfer at the Land Registry | 0.5% of the property value | Buyer |
| Land Tax | Tax on the use of non-agricultural land in Vietnam | Varies from 0.03% to 0.15%, depending on the land size and price per square meter | Buyer |
What fees are involved in a property transaction in Vietnam?
Below is a simple breakdown of fees for a property transaction in Vietnam.
| Fee | Description | Calculation | Who pays |
|---|---|---|---|
| Maintenance Fee | Fee for maintaining development's quality standards | 2% of the selling price of the property | Buyer |
| Notary Fee | Fee for notarizing and authenticating property transfer documents | Varies depending on the value of the transaction, with a miximum of VND 10 million | Buyer and Seller |
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