Property ownership in Vietnam for foreigners
Ownership or long-term rental of real estate for foreigners in Vietnam
We have repeatedly heard that foreigners, when buying a home in Vietnam, do not become its owners, but only receive it for rent for a certain period. In this article, we will inspect in detail is it true or not, and how the ownership of real estate for a foreigner in Vietnam differs from the ownership that Vietnamese citizens have.
Property law in Vietnam
We need to start with the very definition of ownership, what is it? According to the Vietnamese Civil Code, property rights include the right to possess, use and dispose of property. Possession means the performance by a person of actions in accordance with his will in order to control his property. Use - the exploitation of useful properties and profit from the property. And disposal - the transfer of ownership of property to other persons or the waiver of this right.
So, according to the law of Vietnam dated July 1, 2015, foreigners can purchase real estate in Vietnam of a certain category (special projects, commercial real estate, residential development) for a period of 50 years, which can subsequently be extended for another 50 years. In this case, the foreigner receives all the rights of the owner - to possess, use and dispose of the property, as well as a certificate of ownership, the so-called pink book. The difference between the property rights of a foreigner and a Vietnamese citizen is that the pink book is issued to a foreigner for a period of 50 years, after which it is necessary to renew this right. As part of the issue under consideration, I don’t want to get into the jungle of why this is happening, we can say that this is one of the limiting factors for protecting Vietnam from the expansion of its closest northern neighbors.
But Vietnam does not stand still, the economy is developing, and real estate is being built. In order to reduce the costs and time for obtaining permits, some developers do not bother with acquiring the status of specially allocated objects or indicate the purpose of the development is not housing, but tourist apartments. Such actions of the developer are within the legal framework, and in this case, foreigners can purchase apartments under a long-term tourist lease for 50 years.
Long term tourist lease in Vietnam
It is important to understand that a long-term apartment lease agreement gives the foreign purchaser all the rights inherent in the owner - the right to possess, use and dispose of their property. The contract concluded with the developer is certified by a notary and it is impossible to terminate it unilaterally, which completely eliminates the risks for the buyer. The contract establishes the right of the purchaser to live in the apartment, rent it out, give it to management, sell it, donate it or bequeath it. It is important to note that in the case of purchasing real estate in a project that has the status of a tourist apartment, Vietnamese citizens, along with foreigners, do not receive pink books on real estate, but only a long-term lease agreement with the developer.
- How can the lease agreement be extended for 50 years? Perhaps this is one of the most frequently asked questions. By the end of the land lease period from the state for real estate for a period of 50 years, the developer extends his rights to lease the land, after which all apartment owners can also extend their rights to lease through the developer by paying 2% of the registration tax on the cadastral value of the apartment, or this may be made by their heirs.
- How does the resale transaction of your apartments work in the case of a tourist lease for 50 years? If you have a desire to sell your apartment, then you, together with the new buyer, draw up an agreement on the assignment of the right of long-term lease to the new owner at the notary, and then register this agreement with the developer. You will be able to sell your property to both foreigners and Vietnamese citizens, the demand among the local population for tourist apartments has been constantly growing in recent years, despite the ongoing events in the world of events.
Now we can summarize and draw a few conclusions:
- A 50-year long-term tourist lease gives the same property owner rights as the pink book, except for the title;
- The main difference between the ownership of real estate for a foreigner and a Vietnamese citizen is that a foreigner receives ownership for a certain period, which will then need to be renewed;
- The deal to acquire real estate seems simple at first glance. However, to carry it out, you will need specialists who can check all permits from the developer for construction, and in particular the contract between you and the developer, in order to save your money, time and nerves;
- The selection and purchase of your own housing in Vietnam is a huge work of a whole team of professionals, and you can safely entrust it to us. Leadership TSC in Vietnam will be happy to find a suitable property for you, perform verification and complete all necessary documents.