Vietnam to allow foreign ownership

[Jonathan Fairfield]

Vietnam to allow foreign ownership

Vietnam, previous off-the-radar for foreign property buyers and investors, has approved legislation allowing limited ownership of property by foreigners from July 1, 2015.

The move could herald the start of more foreign ownership law changes throughout the region ahead of the ASEAN Economic Community (AEC 2015) which comes into force in one-year from now.

The Vietnamese government’s aim is to inject action in what has been a broadly stagnant real estate sector whilst boosting economic growth at the same time.

The law will allow foreigners with a valid visa, as well as foreign companies and international organisations operating in Vietnam, to own houses and apartments. Previously, only foreigners married to Vietnamese nationals and those making contributions to the country were allowed to purchase property.

Foreigners will be allowed to own a maximum of 30 percent in any apartment building, or 250 houses per ward in the country. This 30 percent rule appears similar to Thailand where foreigners are permitted to own up to 49 percent of the space in any condominium in their own name.

On November 25, the Vietnam’s National Assembly passed 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.

The new law, to take effect from July 1, 2015, removes many of the previous restrictions on foreign individual buyers.

CBRE Vietnam noted that all foreigners granted a visa to Vietnam will be allowed to buy residential properties. All foreign investment funds, banks, Vietnamese branches and representative offices of overseas companies are also eligible to buy.

Purchases of all types of residential property, including condominiums and landed property such as villa and townhouses, can be purchased.

CBRE confirmed 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 percemt 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 buy only one condominium in Vietnam.

Properties owned by foreigners can be sub-leased, traded, inherited and collateralised, where previously the owner could only use the property occupying purposes.

CBRE Vietnam also confirmed the tenure allowed to foreign individuals buying homes is a 50-year leasehold with renewal possibility upon expiration. Foreign individuals married to Vietnamese citizens are entitled to freehold tenure.

CBRE Vietnam said: “The relaxation of foreign ownership restrictions is more significant than previously anticipated, and marks a strong step towards opening up the Vietnam real estate market to overseas investment.

“There are only two major restrictions imposed on foreigners, including a leasehold tenure of 50-years and a cap on the total number of units owned collectively by foreigners in one single condominium project or one administrative (or the equivalent of) ward.

“In addition, there is also no cap on the sizes of dwelling units or number of units a foreigner can buy, or additional tax.

“This recently passed Law makes the market more attractive to Vietnam-based expats seeking an investment in residential properties in Vietnam, and clears away the initial barriers to create a level playing field.”

Adding a note of caution, CBRE Vietnam said: “It should be noted that the implications may not be felt immediately, it will definitely benefit the already improving residential market. Generally, it will provide another boost to the strengthening of confidence and market sentiments, which is currently much needed for Vietnam real estate investment after it lost its lustre post 2008.

“This long awaited change in the Foreign Ownership Law will help create a more balanced, transparent and sustainable residential property market in Vietnam, and is expected to play a major role in correcting, to some extent, the above-mentioned issues, but the participation of the private sector players will also play a big role,” added Dung Duong, Head of Research Vietnam for CBRE.

Source: http://www.propertyguru.com.sg/property-management-news/2014/11/74228/vietnam-to-allow-foreign-ownership

[Lupatria]

and the exodus stars: NOW ! Another nail in LOS' coffin.

[Tham1]

great news

[pkrv]

The 50 year lease only option (50 years rent upfront) - is the killer here. For condominiums the 30% foreign ownership would cause problems outside of the capital. Anything built catering for western tastes, can sometimes mean that the remaining 70% (in this case) is unobtainable and/or undesirable by the mainstream population.

There are examples of this in Thailand.

Edited November 27, 2014 by pkrv

[culicine]

The move could herald the start of more foreign ownership law changes throughout the region ahead of the ASEAN Economic Community (AEC 2015) which comes into force in one-year from now.

Including Thailand? yeah right. Maybe one house per province

[craigt3365]

The move could herald the start of more foreign ownership law changes throughout the region ahead of the ASEAN Economic Community (AEC 2015) which comes into force in one-year from now.

Including Thailand? yeah right. Maybe one house per province

I'd be happy with 1 house in the entire Kingdom!!!!! 55555

[NanLaew]

and the exodus stars: NOW ! Another nail in LOS' coffin.

You think?

This long awaited change in the Foreign Ownership Law will help create a more balanced, transparent and sustainable residential property market in Vietnam...

Nope, I can't see anything in that quote that infers that the curmudgeonly, cantankerous, foreign coffin and tax dodgers of limited means that are on dodgy visas or overstay in Thailand will be able to own anything more in Vietnam than what they think they are entitled to own in Thailand.

Edited November 27, 2014 by NanLaew

[anon022]

You might expect a giant sucking sound in Thailand.

[loongdavid]

Are you watching and listening Mr. Prime Minister because shortly you'll hear the sound of many farang leaving taking with them the money they would have spent in Thailand. I would think that your best option to halt the exodus would be to pass a similar law here before the 'ship sails' and stop the nonsense of everything being anti-farang.

[RigPig]

So you can't own anything you can just get a 50 year lease and only 30% of a condo block can be foreign owned. Not a lot of difference to here really....

[lvr181]

I would hope and expect that the current Thai government will not let this one get away on them. Be proactive NOT reactive!

[jamiesilver]

Great News! lets pack our suitcases and start investing in a country that wants to move forwards. WAKE UP THAILAND - your neigbours are light years ahead of you and their beaches are also nice!

[SGD]

I'd be happy with 1 house in the entire Kingdom!!!!! 55555

But you can own up to 1 rai if you spend Bt40m I think.

A lot of money I agree, but nowhere near as onerous as it appeared a decade or so ago.

[RigPig]

Have any of you ACTUALLY READ the post?

It's only a 50 year lease..........

YOU STILL CAN NOT OWN LAND

[Alwyn]

You might expect a giant sucking sound in Thailand.

Not today, all of the happy ending massage shops have been closed down in Sukhumvit

[Alwyn]

So you can't own anything you can just get a 50 year lease and only 30% of a condo block can be foreign owned. Not a lot of difference to here really....

Big difference. The Thai 30 year lease cannot be inherited for one thing. Whether the Thai 30 year lease can be renewed is a bone of contention as no properties have reached the 30 years yet.. One in Phuket is about 4 years away and nobody is able to sell their lease because nobody is believing the "roll over" bit yet. Also a foreigner can own freehold if married to a local in Vietnam.

[Thai at Heart]

Well, if you can buy a house with land, that will suck the foreign market dry, breath by breath.

[pkrv]

A 49% farang quota condo in Thailand can be owned freehold. In Vietnam it's pay 50 years rent upfront (leasehold)

[konying]

While in the mean time thailand is looking for ways to cut down and restrict foreign ownership yet expecting foreign investment.

Hard to argue with thai logic

[HUAHIN62]

and the exodus stars: NOW ! Another nail in LOS' coffin.

You think?

This long awaited change in the Foreign Ownership Law will help create a more balanced, transparent and sustainable residential property market in Vietnam...

Nope, I can't see anything in that quote that infers that the curmudgeonly, cantankerous, foreign coffin and tax dodgers of limited means that are on dodgy visas or overstay in Thailand will be able to own anything more in Vietnam than what they think they are entitled to own in Thailand.

If you are talking about people like me that pays tax in Thailand and are here on a WP and non B, yes we are selling a property and will invest the proceeds in Vietnam. The B 10 million will not hurt Thailand, but maybe it will be 10 000 x B 10 million or 100 000 x B 10 million that will flow out. We will stay here but will have a plan B for when things go pear shape here.

[RigPig]

So you can't own anything you can just get a 50 year lease and only 30% of a condo block can be foreign owned. Not a lot of difference to here really....

Big difference. The Thai 30 year lease cannot be inherited for one thing. Whether the Thai 30 year lease can be renewed is a bone of contention as no properties have reached the 30 years yet.. One in Phuket is about 4 years away and nobody is able to sell their lease because nobody is believing the "roll over" bit yet. Also a foreigner can own freehold if married to a local in Vietnam.

Still not a HUGE difference. As VN is still communist (no democracy) I would think leaders and rules could be changed at the stroke of a pen. Then you have general lifestyle changes compared to here.

What happens after a divorce? Do you get to keep the land, or does it go to the wife? In which case that is almost the same too.......

Not enough reason for me to ship out yet, that's for sure.

[lvr181]

Never invest in another country what you cannot afford to lose.

[ggt]

This is huge...great step to allow foreigners to feel more at home in Vietnam...Vietnam has an accommodating culture, stable gov't, friendly people, reasonably economic with beautiful beaches and mountains...what's not to like?

[Anthony5]

I'd be happy with 1 house in the entire Kingdom!!!!! 55555

But you can own up to 1 rai if you spend Bt40m I think.

A lot of money I agree, but nowhere near as onerous as it appeared a decade or so ago.

You can own 1 Rai if you invest 40 Million in an BOI approved company, but you can't use that investment to buy the land or build the property.

[NanLaew]

You might expect a giant sucking sound in Thailand.

Lemming...

Are you watching and listening Mr. Prime Minister because shortly you'll hear the sound of many farang leaving taking with them the money they would have spent in Thailand. I would think that your best option to halt the exodus would be to pass a similar law here before the 'ship sails' and stop the nonsense of everything being anti-farang.

Lemming...

Great News! lets pack our suitcases and start investing in a country that wants to move forwards. WAKE UP THAILAND - your neigbours are light years ahead of you and their beaches are also nice!

Another one...

Have any of you ACTUALLY READ the post?

It's only a 50 year lease..........

YOU STILL CAN NOT OWN LAND

Literate...(at last)

[loongdavid]

Yeah we read the post the first time and chose to ignore it. Why let the facts get in the way of a good story.

Edited November 27, 2014 by loongdavid

[NanLaew]

This is huge...great step to allow foreigners to feel more at home in Vietnam...Vietnam has an accommodating culture, stable gov't, friendly people, reasonably economic with beautiful beaches and mountains...what's not to like?

If you think petty crime, corruption, two-tier pricing and scams are getting too much to bear in Thailand, then you're in for a very, very rude awakening after you happily relocate to sunny Vietnam.

[Alwyn]

So you can't own anything you can just get a 50 year lease and only 30% of a condo block can be foreign owned. Not a lot of difference to here really....

Big difference. The Thai 30 year lease cannot be inherited for one thing. Whether the Thai 30 year lease can be renewed is a bone of contention as no properties have reached the 30 years yet.. One in Phuket is about 4 years away and nobody is able to sell their lease because nobody is believing the "roll over" bit yet. Also a foreigner can own freehold if married to a local in Vietnam.

Still not a HUGE difference. As VN is still communist (no democracy) I would think leaders and rules could be changed at the stroke of a pen. Then you have general lifestyle changes compared to here.

What happens after a divorce? Do you get to keep the land, or does it go to the wife? In which case that is almost the same too.......

Not enough reason for me to ship out yet, that's for sure.

No democracy in Thailand either! It always seems a case of "what next" in Thailand. I took a holiday to Vietnam and had a great time, nice people, good food etc, bit like Thailand 20 odd years ago. I can't answer you questions (which are good and fair questions to be sure) about where does the land go to and so on but of a person wanted to relocate in Asia it would be worth finding out. Having said that the property laws in Malaysia are a lot more relaxed and landed property (inside gated communities) can be bought, yet Thailand remains more popular - which is strange really when considering how much better and cheaper medical and dentistry is over there! What I find interesting though is that other Asian countries are making things easier and Thailand is doing the opposite

[bangon04]

The 50 year lease only option (50 years rent upfront) - is the killer here. For condominiums the 30% foreign ownership would cause problems outside of the capital. Anything built catering for western tastes, can sometimes mean that the remaining 70% (in this case) is unobtainable and/or undesirable by the mainstream population.

There are examples of this in Thailand.

foreign ghettoes are the answer....

[nahkit]

Have any of you ACTUALLY READ the post?

It's only a 50 year lease..........

YOU STILL CAN NOT OWN LAND

Yes, I've read it

"Foreign individuals married to Vietnamese citizens are entitled to freehold tenure"

Doesn't sound like its only a 50 year lease to me, are you sure you've read it?

Being able to own land through marriage is a huge difference to here.