Vietnam’s National Assembly passed on November 25, 2014, the long-awaited amended Housing Law that addresses a number of issues including regulations on foreign ownership of properties in Vietnam, replacing the pilot scheme that expired in December 2013.
Dung Duong, CBRE’s Head of Research for Vietnam commented, “The relaxation of foreign ownership restrictions is more significant than anticipated and marks a strong step towards opening up the Vietnam real estate market to overseas investment.
The Vietnam residential market has seen slow growth in recent years due to a number of factors including the previous restrictions on foreign ownership; the lack of quality developers; a speculative bubble from 2006 to 2008; the small size of the leasing market and more attractive and transparent investment opportunities elsewhere in the region.
The new law is expected to play a major role in addressing many of these issues and will help create a more balanced, transparent and sustainable residential property market in Vietnam. Removing many of the conditions on the foreign ownership of property will boost demand and help improve market liquidity, especially for mid-to-high end residential housing as well as vacation and/or second homes. It will make the residential market more attractive to locally-based expatriates looking to invest in property and also stimulate demand from Vietnamese residing overseas.”
The new law, to take effect from July 1, 2015, removes many of the previous restrictions on foreign individual buyers.
Vietnam New Foreign Ownership Property Law Summary:
WHO: Individuals–all foreigners who are granted a visa to Vietnam are allowed to buy residential properties in the country
ENTITIES: All foreign investment funds, banks, Vietnamese branches and representative offices of overseas companies are eligible to buy
TYPES: All types of residential sector including condominiums and landed property such as villa and townhouses (previously only applicable to condominiums)
VOLUME: There is no limit on the number of dwelling units a foreigner can buy, but the total number of dwelling units owned by foreigners must not exceed 30% of the total units in one condominium complex, or not exceed 250 landed property units in one particular administrative (or the equivalent of) ward (previously an eligible foreigner could only buy one condominium in Vietnam)
PURPOSE OF PURCHASE: The properties owned by foreigners can be sub-leased, inherited and collateralized (previously only for owner occupying purpose)
TENURE: The tenure allowed to foreign individuals buying homes is a 50-year leasehold with renewal possibility upon expiration, which remains unchanged compared to previously stipulated. Foreign individuals married to Vietnamese citizens are entitled to freehold tenure.