New law clears path for foreign buyers
New law clears path for foreign buyers
The new Law on Housing passed by the National Assembly will bring positive changes related to housing ownership of foreigners in Vietnam when it comes into effect in 2025.
Talking with VIR, Le Tuan Anh, managing partner of DN Legal, said that foreigners’ right to buy and sell housing from fellow non-nationals is recognised in the new legislation, which was passed on November 27.
“Under the new law, eligible foreigners can acquire houses directly from other foreigners possessing properties in Vietnam, a right which was not previously expressly recognised under the current law,” Anh said.
Under the current law, ownership rights for non-Vietnamese individuals can be reflected in the respective certificates of land use rights, housing ownership, and other assets attached to land, such as land use or housing rights certificate for houses acquired via investing in real estate projects, direct purchases with real estate project developers, or gifts or inheritance.
Each developer can only allocate a specific number of its housing products in each project to foreign buyers. This limitation encompasses a maximum of 30 per cent for apartments and a maximum of 250 landed houses within a commune/ward boundary.
“Thus, if a foreigner wishes to acquire a home in a real estate project from a fellow foreigner or a local individual, the notary office which notarises the transfer agreement will often require pre-approval or confirmation from the developers acknowledging that such a transfer is within the quota limit,” Anh said.
“A limited number of notary offices still proceed to notarise foreigner-to-foreigner transfer, though this is more of a practice note than legislatively allowed. These factors have led to complex procedures in the secondary market for housing products.”
Meanwhile, the new law also stipulates clearly that the government will provide detail guidelines of areas that fall within the criteria of national defence.
“With the new law and guiding decree, we hope to see clear demarcation from the state on sensitive defence areas, which will assist foreigners in determining licensing requirements for issuance of land use right certificates,” Anh said.
Other new points in the new law include expanding conditions for development and access to social housing. In particular, it offers notable points for additional supported subjects such as businesses and cooperatives in industrial parks.
Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association, said that the new law could be one of the best over the past 30 years, ensuring the synchronisation and unity of the legal system.
“The new law has flexible, attractive incentives, for example, using 20 per cent of a project’s land for commercial housing development or service business,” Chau said.
The new law stipulates that the Vietnam General Confederation of Labour is the agency in charge of investing in social housing construction. Vice president of the confederation, Ngo Duy Hieu, said one of the top concerns of workers was housing.
“Currently, the need for housing for workers is huge, while the state’s ability to meet it is still limited, and businesses are not often interested in social housing in general. Therefore, the confederation is suitable to be responsible for building housing for this group of people,” Hieu said.
The new Law on Housing is scheduled to take effect in January 2025, along with corresponding decrees and circulars being drafted, and will replace the law from 2014.
