||Nguyen Dang Minh
The new law on residential housing came into force on
July 1 2015. The legislation, in addition to its guiding
documents including Circular 19/2016/TT-BXD (effective from
August 15 2016), has paved the way for foreign ownership of
property in Vietnam.
The new law has broadened those who are eligible to own
houses in Vietnam to include:
- foreign organisations and individuals who invest in
project-based housing construction in Vietnam;
- foreign-invested enterprises, branches, representative
offices of foreign enterprises, foreign funds and branches of
foreign banks operating in Vietnam; and
- foreign individuals who are allowed to enter Vietnam
(collectively, foreign entities).
Foreigners now have a significant opportunity to own
property in Vietnam. This new policy is remarkable, considering
that Vietnam had been enforcing a strict policy regarding
ownership of real estate before the promulgation of this
The types of houses eligible for foreign ownership consist
of condominiums and detached houses in housing projects, which
would well serve the demand of foreign entities. The ownership
term applicable to foreign individuals is limited to 50 years.
However, this can be extended for up to another 50-year period.
For foreign individuals who married Vietnamese citizens, the
ownership term would be stable and long-term (indefinite). The
ownership term applicable to foreign organisations must be as
agreed in the house purchase agreements. It must not exceed the
term stated in the investment registration certificates or
other documents permitting its operation in Vietnam (including
the extended term).
Nevertheless, foreign entities are subject to statutory
restrictions on ownership of houses. In principle, the state
authorities will announce the list of housing projects, the
number of houses, and other criteria, that foreigners may own.
Notably, there are restrictions in the areas of national
defence and public security. There is also a limit on the
quantity applicable to foreign entities. For apartment
buildings, this is up to 30% of the total apartment units for
residential purpose. For detached houses, in general, this is
up to 10% of total number of houses of a project. However, it
must not exceed 250 houses in an area the population of which
is equivalent to that of a ward.
As a result of the new legislation, the market has witnessed
several sales of houses to foreign individuals, notably in Ho
Chi Minh City, Binh Duong Province, and Da Nang City. This may
have contributed to the increase of housing development
projects in the country.
Kazuhide Ohya and Nguyen Dang Minh