After the Foreign Investment Law of 1987 was promulgated, Vietnam has become a potential destination for foreign investors. After the start-up period (1988 – 1990), from 1991 up to now, FDI inflows into Vietnam have grown quite steadily. According to the 7th Southeast Asia Digital Economy Report, With an increase of 28% (from 18 billion USD in 2021 to 23 billion USD) in 2022, Vietnam is considered the country with the highest digital economic growth in Southeast Asia. With a growth rate of 31% in the period 2022-2025, the company forecasts that Vietnam’s digital economy will reach about $49 billion by 2025 and reach a record of $120-200 billion by 2030. All thanks to the implementation of effective monetary policies. The positive signals of the economy and the newly revised land law have led to a strong increase in real estate demand from foreign buyers.
Conditions to buy real estate in Vietnam
Organization: The organization must have an investment certificate licensed to operate in Vietnam, issued by a competent Vietnamese state agency, which is still valid at the time of signing the house purchase or lease purchase contract.
Individual: Individuals must have a valid passport bearing the entry verification stamp of the Vietnam Immigration Department; Individuals are not entitled to diplomatic privileges and immunities.
Types of real estate foreigners can buy
Apartments in new project: foreigners can buy apartments in new project directly from the project developer. The apartment can be completed or still under construction.
Resale apartments from foreign owners: foreigners can buy resale apartments from other foreign owners. If the old owner owns the apartment for x years, the buyer can own that apartment for (50-x) years left.
Can foreigners own landed house / villa? In practice, it’s not possible.
Forms & term of real estate ownership for foreigners
Foreign individual or foreign organization can buy, lease, lease-purchase, inherit real estate according to the provisions of the law on housing.
Ownership term: 50 years
Ownership Certification: Pinkbook is the official ownership certification in Vietnam when you buy an apartment with the sale and purchase contract. Customers can not have Pinkbook by signing Lease-purchase Contract (Leasehold ownership).
Procedures to buy an apartment
Apartments in new project
Required papers: Passport & valid visa
Pay the deposit / down payment -> Sign the SPA (sale & purchase contract) -> Pinkbook Application after the handover -> the buyer will receive the Pinkbook within 6 months.
Required papers: Passport & valid visa
Pay the deposit / down payment with the seller -> Sign the SPA (sale & purchase contract) in the notary office -> Pinkbook appliance & tax declaration -> Pay registeration tax-> Receive the Pinkbook within 45 days.
Price Components & Taxes
For apartments in new project, Gross sale price includes the net sale price, VAT and maintenance fee. VAT is equivalent to 10% of the net sale price. Maintenance Fee is equivalent to 2% of the net sale price.
Taxes and Fees
Apartments in new project: VAT & Registration Fee. Registration fee for applying the Pinkbook is 0.5% of the sale price.
Resale apartments: The seller has to pay income tax that is equivalent to 2% of the sale price in all circumstances. The buyer has to pay the registration fee (0.5%) and the appraisal fee (0.15%). Besides, there are some arising fees such as negligible fees related to paperwork, notarization & translation fee.
Rental taxes: In case the income from renting out an apartment is more than 100,000,000 VND / year, the apartment owner has to pay VAT (5%) and income tax (5%).
Who can foreigners sell their apartments to? To vietnamese and other foreigners. The ownership becomes freehold if the buyer is vietnamese.
Buy apartment remotely from abroad: This method of purchase is not popular because only some developers can support foreign customers to purchase apartments remotely from abroad. Foreign customers should make sure that they can enter Vietnam. Imperia Smart City is one of the rare project that foreign customers can purchase apartment remotely from abroad.
Visa / Residence Permit Support: At the moment, owning real estate in Vietnam does not give any support of visa or residence permit.
What banks can foreigners open an account at? All banks in Vietnam support foreigners to open an bank account as long as customers are in Vietnam. However, HSBC can support their Premier Customer open bank account in Vietnam though they are not in Vietnam.
Have a loan to buy real estate in Vietnam? Unfortunately, this is not possible for foreigners.
Thank you for reading all you need to know about purchasing real estate in Vietnam. For any further information, please don’t hesitate to contact us.