Time is now to clear up property ownership overlap
Time is now to clear up property ownership overlap
The Ministry of Construction wants gaps between the housing and land laws closed in order to boost the chances of foreigners purchasing private homes in Vietnam.
Minister of Construction Nguyen Thanh Nghi earlier in April reported to the prime minister on receiving and explaining the conclusions of the National Assembly Standing Committee and the preliminary inspection report from its Law Committee on the revised Law on Housing.
The ministry (MoC) cited that the 2014 law allows foreign individuals entering Vietnam to buy and own houses in Vietnam (including individual houses and apartments) in certain areas. Foreign buyers are granted certificates of land use rights, and ownership of homes and other land-attached assets in accordance with the regulations on land.
However, according to Article 5 of the Law on Land 2013 and the draft revised version, foreign individuals are not eligible to use land in Vietnam. In addition, Resolution No.18-NQ/TW issued in June 2022 on perfecting the effectiveness and efficiency of land management and use does not mention the use of land by foreign individuals in Vietnam.
“If it is not specified that foreign individuals or foreigners have the right to use land, it will be contrary to the provisions,” the MoC said.
The issue continues to be brought up at regular Vietnam Business Forum (VBF) meetings. Speaking at VBF 2023 in the presence of Prime Minister Pham Minh Chinh in March, European Chamber of Commerce in Vietnam chairman Gabor Fluit emphasised that the delay in granting land use right certificates to foreigners has significantly affected various stakeholders.
“The holder of such a certificate may have to bear the consequences if a dispute arises with the seller of the land use right certificate,” he said. “Moreover, the delay in granting certificates may also make foreign investors hesitant to invest more in the real estate market.”
According to current regulations, local authorities must issue their own lists of areas that are prohibited for foreigners to buy property. But this procedure is very rarely carried out.
“If there is no list of projects that prohibit foreign ownership, the competent authorities may be confused in granting or delaying the issuance of land use right certificates to foreigners,” added Fluit.
The MoC stated that a clear recognition of foreigners’ rights in the land law would help solve the current problems. In addition, a consistent legal framework will also help attract foreign individuals to own various types of real estate such as condotels, tourist villas, resort villas, bungalows, officetels, and shophouses.
It is expected that the draft amended Law on Housing will be submitted in May and could be considered and approved at the sixth session of the XV National Assembly.
According to preliminary statistics from localities, the number of foreigners who have been granted certificates stands at a modest 3,000 individuals and organisations, mainly for apartments. The country is currently home to more than 80,000 non-nationals.
The MoC said that it has not received reports on foreign organisations and individuals buying individual houses such as villas or townhouses.
