Vietnam is now widely considered the next hotspot in the luxury real estate market. The country has a booming economy and laws that have recently made it easier for foreigners to buy property. As a result, wealthy international investors have flocked to the country in recent years. There are many cities and islands in Vietnam where foreign investors are looking to buy property. Ho Chi Minh City, the financial centre and largest city, is undoubtedly the most popular option.
But cities like Hanoi, Da Nang and Nha Trang are also targets for investors. However, there are also people who come and stay in Vietnam not only for business reasons, but also to buy property. When you come to a country to stay, you have to find a place to live. Many choose to buy, especially if the move is final – so why wait? In addition to tenancy rights for foreigners in Vietnam, there is also the right to use land, commonly known as the Land Use Right (LUR).
Through this land use right, foreigners have the opportunity to be allocated a piece of land by the state to use for professional purposes. This piece of land always remains the property of the Vietnamese state, but there is the possibility of leasing it or entering into a contract, marked by a Land Use Right certificate, which allows foreigners to use the land. There is the question of real estate acquired directly from Vietnamese owners, including primary market developers. Within the legal framework, this is possible if the foreigner quota of 30 for the property in question has not yet been reached.
The purchase of such property from a foreigner who has already acquired the property on the primary market is also possible, always in compliance with this foreigner quota. Local and foreign property owners can therefore transfer their property to you as long as this restriction for the secondary market is respected. The Vietnamese Ministry of Defence and National Security demarcates certain areas, such as protected areas, where the purchase of real estate or land is prohibited for foreigners. These areas are not specified, so it is essential to make sure that the property or sub-plot you intend to buy is not classified as a reserved area for the protection of the country and its security.
Otherwise, if you start the process and it turns out that the property is located in an area protected by the Vietnamese Ministry of Defence, you will be very disappointed to learn that you will never be able to complete your projects because a title deed cannot be issued for a property in a reserved area. This is a small pink booklet that gives the details of the property you have purchased. This little booklet certifies that you own the property and gives you the right to use the property as you wish. This booklet is also used for rental purposes if you wish to rent out the property in question; it is also a very important document in property declaration and tax procedures.
If you inherit a property, this pink book is also used for the various administrative procedures. This certificate is the most official proof that you are the owner of a property. The equivalent of this pink book is the red book when it comes to land ownership. Every purchase of real estate or land must be proven by a title deed. A simple contract of sale is not sufficient for the administrative authorities to prove that you are indeed the owner.
Possession of these two documents is irrefutable proof that you have purchased the property and are now its legal owner. With these documents, you can complete all the administrative formalities with peace of mind, and even if you want to sell later, there will be no problems or disputes. The best districts to buy property in Ho Chi Minh City Ho Chi Minh City is divided into a number of districts, often referred to as District 1, District 2, District 3 and so on. There are also a handful of districts with special names, such as Binh Tanh.
The city is very lively, there are many foreign businesses, and the pace of life is almost as fast as in big cities in highly developed countries. Depending on the different criteria, the wisest thing to do is to contact a French real estate agent who knows exactly your needs, your investment horizon and your budget. You can be guided from the moment you learn about the real estate market to the viewing of your first property (from a distance or directly in your city, preferably in Vietnam), to the signing of the property and legal guidance from a notary and a lawyer used to dealing with foreigners of your nationality. Their websites are easy to navigate and you can search for a property in your preferred area.
It is important that you find an experienced agent before you enter the property market. This is especially true for new and unplanned projects, which foreigners are usually only allowed to buy under a condition already explained above. Currently, the average price per square metre is $3800, and in total you need to budget around $200,000 for the purchase and all related costs (the price varies, of course, depending on the size and location of the property in question). Not to mention the legal fees for acquiring the various title deeds and pink book.
However, if you invest in property for a tourist or rental project, the investment will pay for itself in a short time in busy areas. If you are married to a Vietnamese man or woman, you can enjoy certain privileges and reduce the cost of property acquisition. Nevertheless, foreigners can easily plan a purchase project in Vietnam even without the spouse of a Vietnamese man or woman. VAT is 10%, with some exceptions, on goods and services.
An additional tax may be levied, a kind of special tax that applies to goods considered luxurious. VAT is calculated based on the selling price of the property. If you are seduced by the beauty of Vietnam, or if you are going there on business and are considering buying a house, you will find all the information you need here. And if you are in the process of optimising a real estate investment project in Vietnam, be it for tourism purposes or for renting out, these few paragraphs will help you see more clearly and identify the mandatory points for your project to see the light of day.
In any case, the decision to settle in Vietnam remains a very good choice, as the country is on a very good path to economic growth and many investors are also turning to this Southeast Asian country as they sense its potential. The property you are about to buy is a legacy for your children, but could also be a source of great profits if the property market in Vietnam explodes in the next few years. Take advantage of the growing Vietnamese economy and invest in real estate in Vietnam. Cekindo will not only guide you through the entire buying process, but also assist you with legal compliance and business registration.
Investing in Vietnamese real estate has some advantages, but the disadvantages outweigh them. Below are some of the main risks associated with investing in Vietnamese real estate. Virtually everything of business importance in Vietnam is conducted through Ho Chi Minh City, making the Vietnamese property market popular with expats and foreign investors. Recently, foreign “fintech companies” have made it possible for expats or investors to benefit from loans to invest in real estate in Vietnam.
Let’s take a brief look at taxation in Vietnam and then discuss how these taxes can affect property investors. Some of the fees and charges to be aware of as a foreigner investing in Vietnamese property are as follows. Real estate agents in Vietnam say that there are still some “minor issues when buying property, such as the fact that the number of properties you can buy depends on the number of foreign investors already in the area. A video is worth a thousand words, so here are two videos that illustrate and elaborate on the topic of property investment in Vietnam.
There are many reasons to invest in Vietnamese real estate now and not wait until it gets easier – apart from the fact that barriers to entry are currently keeping asset valuations low. Let’s move on to today’s main topic: “Why it is not good to invest in Vietnamese real estate”. This makes Vietnam attractive to Chinese buyers who view real estate as a long-term investment, whether as a primary residence or for rental. There are a few things to consider when investing in Vietnamese real estate, which are listed below.