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THINGS FOREIGNERS NEED TO KNOW WHEN PURCHASING HOUSE IN VIETNAM
08
Jul
Jul
Since July 2015, the Vietnamese Government has officially allowed foreigners entering Vietnam to buy and own houses. Its GDP strongly grows up to 6-7%/year thanks to effective monetary policies of the Government of Vietnam. The positive signs of the economy and the newly revised land law have led to a sharp increase in supplies from foreign buyers wishing to own real estate in Vietnam.
How can foreigners own real estate in Vietnam?
Current law: Effective from July 2015
Applicable subjects: Foreign individuals allowed to enter Vietnam
Real estate: Apartments and individual houses in residential real estate projects
No more than 30% of apartments in an apartment building
No more than 10% of projects (villas or individual houses) in construction investment projects or no more than 250 units in a ward-level administrative unit
Applicable time: Foreign individuals may own houses for no more than 50 years from the date of issuing the Certificate; upon the expiry of the house ownership term stated in the certificate, if the owner needs to extend it, the State shall consider and extend it.
Open a bank account in Vietnam
Foreign investors should open an account in Vietnam when they need to pay for investors. Home buyers should open an account at international banks with branches in Vietnam such as ANZ, Citibank, HSBC and Standard Chartered.
Taxes to know in the process of buying real estate.
Foreigners can directly or authorize a third party (by proxy) to declare and pay taxes at a tax office in the district where the real estate is located.
Ownership: Buyers must pay 10% value-added tax on any transaction of an individual who buys house, even Vietnamese or foreigners.
Administrative costs: A negligible fee related to paperwork when receiving a certificate of housing ownership under applicable law.
Registration fee: 0.5% of the apartment value for registration fee when registering a house ownership certificate.
Maintenance fee: This is a shared fund contributed by the buyers for maintenance of shared parts of the project. Currently, the maintenance fee is 2% on the pre-tax apartment selling price.
Resale: Personal income tax is 2% of the transaction value for apartment transfer transaction.
Rental: Personal income tax is a tax on income earned from renting a house including 5% of personal income tax and 5% of value added tax. For income from renting in excess of VND 100 million a year, the business tax is VND 1 million for one year.