Law could simplify buying homes

Law could simplify buying homes

Viet Nam is considering changing the amended Housing Law, which is now under discussion, to make it easier for foreigners and Vietnamese expatriates to buy houses in the country. Out of 126 foreign home-buyers, 80 per cent are individuals while the rest are businesses. The low figure is attributed to the fact that buying property is currently more expensive than renting.

Once foreign nationals own a residence, they are not allowed to sublet the property even if it is not fully occupied or left vacant when their employees return home. This is one of the reasons why many foreigners are not interested in the market.

Meantime, several enterprises build residential areas specifically for their employees to cut costs and manage their staff better. In some cases, home-seekers find it hard to find suitable apartments near their respective workplaces.

Of the buyers, foreign nationals married to Vietnamese citizens make up as much as 80 per cent while individual investors or business executives account for only 15 per cent.

Employed foreign individuals with college degrees represent a mere 5 per cent. So far, no foreign nationals possessing the special skills and merits which the President and Prime Minister are seeking have bought homes in Viet Nam.

The home property market is showing signs of recovery, mostly in the mid-range sector, whereas a majority of high-end residences remain empty.

Therefore, drawing foreign capital inflows into the real estate market is seen as an immediate on-the-spot export, said Deputy Construction Minister Nguyen Tran Nam, adding that this would make Viet Nam more competitive with regard to housing ownership policies for foreign nationals.

The expansion of housing purchase regulations for foreign individuals and organisations has received public approval. It will encourage foreign investors to acquire and own houses in Viet Nam, thereby attracting investments and mobilising resources, expertise, and technology, as well as contributing to the domestic property market and international integration process.

However, in order to open the sector without losing control, regulations must be put in place at all stages, from issuing policy to monitoring implementation.

Regulations on residency in Viet Nam and other legal provisions to prevent speculation and manipulation of the property market, as well as money laundering, will be tightened, and a legal framework and jurisdiction will be set up.

Foreign individuals and organisations who purchase and own houses in Viet Nam are subject to the same entitlements and obligations as their Vietnamese counterparts. In addition, they must also comply with certain provisions.

Accordingly, owners who are foreign nationals are entitled to lease their properties for purposes permitted by Vietnamese laws, but they must pay income tax on their rent and give written notice to housing management authorities at provincial levels.

In addition, owners who are foreign organisations are only entitled to use their houses for accommodating their personnel. Subletting the property or using it as office space is prohibited. Financial transactions for purchasing or leasing the property must be completed via financial credit institutions legally operating in Viet Nam.

According to the draft law, foreigners, excluding diplomats and those who work for non-governmental organisations, will be allowed to buy and own property in Viet Nam once they obtain a work permit.

Foreign invested-enterprises, branches and representative offices of foreign companies, foreign investment funds and foreign banks shall also be entitled to purchase and own houses in Viet Nam.

In addition to apartments, foreign individuals and organisations shall be permitted to own villas or townhouses as part of commercial housing development projects where foreigners are not restricted and prohibited to live, as stipulated by the Ministries of Defence and Public Security.

Foreign individuals shall have the right to own houses for no longer than 50 years from the date of receiving the house ownership certificate. Extensions will be allowed but must be in compliance with existing laws. Long-term and permanent ownership of houses is allowed for foreigners married to Vietnamese citizens.

Meanwhile, organisations shall be allowed to own houses for no longer than the term stated in the investment certificate that they have been granted, including extensions. The house ownership term starts on the issue date clarified on the certificate.

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