Tilleke & Gibbins
Can anyone (including foreigners) own and occupy real estate in your jurisdiction (including shares in property owning companies)? Are there any restrictions?
- Foreign developers may own, sell, and lease houses/apartments to eligible purchasers in Vietnam.
- Other foreign companies (not developers) may own houses or apartments in commercial projects for their staff to reside in.
- Foreign individuals who are allowed to enter Vietnam may own houses or apartments in commercial projects for a period of up to 50 years (which is renewable).
Are there restrictions on lending for the purchase of real estate by foreign companies? If so briefly give an outline?
There is no restriction on an eligible foreign company, as defined in the previous box, taking out loans for the purchase of real estate in Vietnam.
Buying
Please provide a short summary of the fees and costs (including tax) relating to buying real estate in your jurisdiction.
The transfer of land use rights in Vietnam is currently not subject to value-added tax (VAT).
The transfer of property or assets attached to land is subject to 10% VAT except in the case where state-owned residential houses are sold by the state to existing tenants. The transfer of social houses is subject to 5% VAT only. The payer of VAT is the buyer.
The buyer is also required to pay the registration fee which is equivalent to 0.5% of the value of real property.
Owning
Are there taxes applicable to owning real estate and can the burden of the taxes be passed to someone else (e.g. a tenant or an occupier - not being the owner)?
There is currently no tax applicable to mere ownership of real properties in Vietnam. However, if the land is non-agricultural land, then the land user must pay a non-agricultural land tax which is calculated on the price of the land per square meter (calculated and published by the provincial People’s Committee) multiplied by the land area and the tax rate (which is progressive, from 0.03% to 0.15%) (i.e., land price/m2 × area × tax rate).
If a real property is leased out, the lessor is subject to corporate income tax or personal income tax (depending on whether the lessor is a company or an individual). The lessee is subject to VAT. However, in practice, the parties may agree upon who will pay relevant taxes.
Tax Breaks
Are there tax breaks or other incentives for foreigners to buy real estate in your jurisdiction? If so what are they?
Currently, there is no tax break or other incentives for foreigners to buy real estate in Vietnam.
How is the ownership of Real Estate evidenced in your jurisdiction?
Property owners must be granted a “Certificate of Land Use Rights, Ownership of Residential Housing and Other Assets Attached to Land” which is the conclusive documentation of their ownership over the property.
Is it possible to keep the identity of owners of real estate confidential in your jurisdiction?
Theoretically no. Vietnamese laws allow a person to verify the status of a parcel of land (including the identity of the owner) at the land authority. However, as a matter of practice, if there is no power of attorney from the owner to the applicant (for the verification of the land), the land authority may refuse to disclose the details of the land parcel.