The Real Estate Buying property in Vietnam isn’t so straight forward, some might even call it a completely onerous process. Freehold property is not available for both Overseas buyers and Vietnamese national.
The land in Vietnam is owned and controlled by the people under the Communist system and regulated by the Vietnam State.
Currently the only way to buy real estate in Vietnam as a foreigner is to form a joint-venture with a Vietnamese company and own and manage property in that way.
Foreigners who are now resident in the country can own dwellings on a leasehold basis, but are not allowed to sub-lease these.
The other major difference in the buying process in Vietnam is that all transactions are carried out in pure gold. While this seems like a quirky and antiquated system, it means that any buyer in Vietnam needs to keep a very close eye on the cost of metals for the best time to buy, as the fluctuating markets could make your property suddenly much more expensive.
The process of buying the property itself and registering the documents is relatively straightforward, and takes around nine to ten weeks.
Interestingly neither Vietnamese nationals or Foreigners are permitted to own land in Vietnam. Land in Vietnam is considered to be owned by the vietnamese population and regulated by the government.
Generally land in Vietnam is acquired via a 50 year land lease that has renewal rights at the end of the 50 year period, Foreigners can legally own the property on the leased land.
If complete property ownership becomes legal for foreign nationals in Vietnam then the Vietnamese property development or compound property management company will transfer the apartment title to the foreign buyer.
Foreigners can also invest in Vietnamese property by creating a joint venture company with a local Vietnamese partner, or a wholly foreign-owned company, or by forming a Build, Operate and Transfer (BOT) company.
Foreigners who are legally working and living in Vietnam with resident permits can own houses but are not allowed sub-lease these properties.
Foreign residents in Vietnam can sell, inherit, donate or give a property as a gift.
If a Foreigner owns a property in Vietnam under the residence ownership agreement, if the Foreigner leaves Vietnam terminating their residence they are required to transfer the property to a local partner or wholly foreign-owned company, not doing so will lead to the termination of their residence ownership and after 90 days the property certificates will be allocated to the Vietnamese government.
Something very interesting about buying real estate inVietnam is that all property purchases are paid for by pure gold. It is very important to keep the price of gold and its equivalent in Vietnamese dong in mind.
Registering the ownership of a property in Vietnam is generally a straight forward process taking around 70 days to complete the 5 procedures and costing relatively less than other destinations in Asia.
Currently there is no property tax in Vietnam, however it is expected that a property taxation system will be introduced in 2012.
Similarly like the current situation in China the introduction of property tax should have an affect on property speculation in Vietnam.
Foreign investors have returned to Vietnam ready to invest in cash-troubled Vietnamese property developers.
Foreigners armed with capital are demanding higher returns than previously and expect closer ties with management.
The Vietnamese government has restricted bank lending to local property developers, which is putting the developers under great stress and has allowed for “Golden opportunities” for cash rich foreign investors such as Morgan Stanley , Blackstone and JP Morgan who are looking to purchase attractive distressed assets.
Vietnam’s property development and construction industry has been slowing since to the lack of available credit, an stream of overseas foreign investors from the United States, South Korea and China have been delivering a stream of foreign direct investment (FDI) that is keeping Vietnam’s real estate market alive.
We are now seeing a number of foreign construction firms undertaking the development of Vietnams most exclusive high-end property developments which are usually high-rise buildings in the city centres’ of Hanio and Ho Chi Minh City.
Overseas Foreign companies in Vietnam usually have the advantage and leverage of the abundance of capital to access even more capital with preferential conditions, longer repayment terms of lending that local companies cannot obtain.