Vietnam has a dynamic real estate market, which, combined with the country’s fast-growing economy, makes it an attractive destination for real estate investments. However, foreigners must navigate the country’s unique property ownership regulations. In this guide, we break down the key information you need to understand regarding expat property ownership in Vietnam.

2. What Are the Legal Requirements for Foreigners to Own Property in Vietnam?

Expat ownership in Vietnam is regulated by the Vietnamese Constitution and the Law on Housing. While foreigners can purchase property, they are subject to specific regulations, such as the 10% ownership cap on apartments in certain developments.

Legal Framework for Foreign Ownership

Foreigners are allowed to own property in Vietnam, but there are restrictions on their ownership rights. The Vietnamese Constitution and Law on Housing regulate property ownership for foreigners, which includes certain limitations to ensure that the majority of properties remain in local Vietnamese hands.

Foreign Ownership Limitations

• Apartments: Foreign nationals can own up to 10% of the apartments in a building. This rule applies to condominiums, where no more than 10% of the units can be owned by foreigners.
• Land Ownership: Foreigners are not allowed to own land in Vietnam. Instead, they can enter into land lease agreements for a term of up to 50 years, with the possibility of extension depending on the contract terms.
• Foreign Ownership in Real Estate Projects: Foreigners are generally not allowed to own more than 10% of the properties in any given development project. This limit also applies to mixed-use developments where residential, office, and commercial units are combined.

3. Types of Property Foreigners Can Buy in Vietnam

Foreigners interested in expat ownership in Vietnam can buy various types of property, including apartments, townhouses, and villas, subject to legal restrictions. Understanding the limits and laws around foreign property ownership is crucial before making an investment.

1. Residential Properties

Foreigners can buy apartments, townhouses, and villas in Vietnam, provided they adhere to the legal restrictions mentioned above. However, they cannot buy land outright. Foreigners are permitted to buy real estate through land leasehold agreements, which typically last for 50 years and may be extended.

2. Commercial Properties

Foreigners are allowed to purchase commercial real estate such as office spaces and retail properties. These properties are typically leased on long-term contracts and are an attractive investment option for foreign companies and multinational corporations.

3. Mixed-Use Developments

Foreigners can also invest in mixed-use developments, which combine residential, commercial, and retail spaces. However, as with apartments, the total percentage of foreign ownership in such developments is subject to the 10% foreign ownership limit.

4. The Process of Buying Property in Vietnam as an Expat

Step-by-Step Guide to Buying Property in Vietnam

The process of buying property in Vietnam can be complex, especially for expats. Below is a step-by-step guide to help you navigate the process:

1. Choose the Property: The first step is to decide on the type of property you wish to buy (apartment, villa, or commercial real estate). Many expats prefer properties in District 2 or District 7 in Ho Chi Minh City, as these areas offer quality living and are popular among expat communities.
2. Check for Foreign Ownership Availability: Ensure that the property you wish to buy does not exceed the 10% foreign ownership limit in its respective development. If the property is within a development that has already reached the foreign ownership cap, you will not be able to proceed with the purchase.
3. Legal Assistance: It is highly recommended to hire a local lawyer or real estate agent to guide you through the legal aspects of the transaction. A lawyer can assist in drafting contracts, verifying property titles, and ensuring compliance with Vietnamese property laws.
4. Verify the Property’s Legal Status: You need to ensure that the property is legally registered, with a clear title deed. Ensure the seller has the right to sell the property, and check the land use rights.
5. Submit the Required Documentation: As a foreign buyer, you will need to provide:
   • A valid passport
   • Proof of legal residence (visa, work permit, etc.)
   • Signed agreement between the seller and the buyer
6. Payment and Transfer: Once the necessary legal checks have been completed, you will need to make the payment. Foreign buyers typically transfer funds to Vietnam through a foreign currency bank account. After the payment is made, the property will be registered in your name.

5. Understanding the 10% Foreign Ownership Rule in Condominium Buildings

Foreigners are only allowed to own up to 10% of the total apartments in a condominium building. This means that the total number of apartments available for purchase by foreigners is limited, making it crucial for expats to act quickly when they find the right property.

If the foreign ownership limit has already been reached in the building or project, you cannot purchase the property. However, developers are often transparent about foreign ownership, and they will inform you if the limit has been reached.

6. Land Ownership for Foreigners in Vietnam

Land Leasehold Agreements

Foreigners cannot own land in Vietnam. However, land leasehold agreements allow foreigners to lease land for a term of up to 50 years, with the possibility of extension. These agreements are common for foreigners who wish to invest in commercial properties, residential complexes, or luxury homes.

The Vietnamese government has implemented this system to prevent land speculation and ensure that land remains under the control of local Vietnamese citizens.

7. Property Taxes and Costs for Foreigners in Vietnam

Property Taxes

Foreign property owners in Vietnam are subject to several types of taxes:

• Property tax: This is an annual tax based on the value of the property.
• Land use tax: For foreigners leasing land in Vietnam, they will be required to pay a land use tax.
• Capital gains tax: If you sell the property, you may be subject to capital gains tax on the profit made from the sale.

Additional Costs

• Notary fees for contract signing.
• Real estate agent commissions for buying and selling.
• Lawyer fees for legal services.
• Registration fees when transferring property.

8. Conclusion: Is Owning Property in Vietnam Worth It for Expats?

Owning property in Vietnam offers several benefits for expatriates, including a stable market for long-term investments, potential capital gains, and strong rental yields, especially in popular expat areas like District 2 and District 7.

However, it’s essential to understand the legal complexities and restrictions on foreign ownership in the country. By hiring local legal experts and real estate agents, expats can ensure that their property transactions are smooth and compliant with Vietnamese laws.

If you’re considering buying property in Vietnam, ensure that you:

• Adhere to the 10% foreign ownership limit,
• Understand the terms of land leasehold agreements, and
• Seek professional guidance from a trusted lawyer or real estate agent.

9. Call to Action

Are you an expat interested in owning property in Vietnam? Contact YOHO Agency today for personalized advice and guidance on how to navigate the property buying process in Vietnam. Whether you’re looking for an apartment in District 2 or a villa in District 7, our experts are here to help you find the best investment opportunities.

Contact Us for personalized real estate investment advice.

10. References

• CBRE Vietnam
• Colliers Vietnam