On 25 November 2014, the National Assembly of Vietnam passed the new Law on Residential Housing which replaces the current one and the pilot scheme for foreign ownership of residential houses in Vietnam that expired in December 2013. The new law, with many relaxing conditions for foreign ownership of houses in comparison with the current scheme, is expected to boost the Vietnamese real estate market. The new law will come into force on 1 July 2015.
Eligibility: Foreigners who are granted a visa to Vietnam are permitted to purchase residential properties. This can be seen as a very open condition in comparison to requiring 12 months residence in as stipulated under the pilot scheme. All foreign invested companies, branches, representative office of foreign entities, foreign investment funds and branches of foreign banks operating in Vietnam are also entitled to buy residential properties.
Types of house:In the past, foreigners were allowed to buy apartments only. Under the New Law, there is no restriction in terms of type of residential properties; foreigners shall be entitled to buy apartments and houses such as villas and townhouses in housing projects.
Number of properties:The limitation on the number of properties owned by foreigners is now removed. The New Law has no restriction on the number of properties that a foreigner can buy, however the total number of 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 ward.
Duration of ownership: Similarly to the pilot scheme, foreign individuals are allowed to own houses for a limited duration of 50 years with renewal a possibility upon expiration. Foreign individuals who are married to Vietnamese citizens shall be entitled to freehold tenure.
Use of the property: Previously foreigners could only use residential properties for their own residential purpose. Under the New Law, foreigners can now enjoy the same rights as Vietnamese citizens in ownership of residential properties, including rights to sub-lease, trade, inherit, and mortgage.
For further information on this alert, please contact our advisers: Jérôme Buzenet, Tran Thi Vu Hanh, Huynh Dai Thang
