A new draft decree clarifies regulations on foreign property ownership in Vietnam, including criteria, limitations, and permitted methods for acquiring housing.
Vietnam’s Ministry of Construction has released a draft decree to guide the implementation of the country’s amended Housing Law, which will come into force on January 1, 2025.
The draft decree clarifies regulations on foreign ownership of housing in Vietnam, including criteria for foreign individuals and companies to own housing in Vietnam, limits on foreign housing ownership, and permitted methods for acquiring housing.
Below, we explain the new rules of property ownership for foreigners and discuss the proposed regulations in the draft decree.
Regulations on foreign property ownership
Under the Housing Law, foreign organizations and individuals who are allowed to own houses in Vietnam are as follows:
- Economic organizations with foreign investment capital engaged in residential construction projects in Vietnam as stipulated by the Housing Law and other relevant legal regulations.
- Economic organizations with foreign investment capital, branches, representative offices of foreign enterprises, foreign investment funds, and branches of foreign banks operating in Vietnam (collectively referred to as foreign organizations).
- Foreign individuals who are permitted to enter Vietnam.
The economic organizations listed in (a) above can only own housing by executing housing construction investment projects in Vietnam.
Foreign organizations and individuals listed in points (b) and (c) can acquire housing through purchasing or lease-purchasing commercial houses from the investors of residential construction investment projects, receiving gifts, or inheriting commercial houses within residential construction investment projects. However, such property cannot be in designated areas that require national defense and security assurance, which we will discuss below.
The types of housing that can be owned by the above individuals and organizations include both apartment units and individual houses.
Restrictions on foreign housing ownership in Vietnam
Prohibited areas for foreign housing ownership
Foreign organizations and individuals are not allowed to own houses in projects located in areas requiring “national defense and security assurance”. These areas are as follows:
- Critical areas requiring national defense and security assurance within provincial territories;
- Border communes, border adjacent areas, and island areas;
- Areas containing military bases and armed forces;
- Areas containing headquarters or offices of state administrative agencies, and Party organs from the provincial level and above; and
- Other areas specified by the Ministry of National Defense (MND) and the Ministry of Public Security (MPS).
Housing quota restrictions on foreign ownership
Under the Housing Law, Vietnam will impose caps on the number of houses that can be foreign-owned in different areas.
First, foreign organizations and individuals are only permitted to acquire (through the permitted methods mentioned above) up to 30 percent of the total number of apartments in a condominium building. If it is for individual houses, such as villas and semi-detached houses, then within an area with a population equivalent to that of a ward, they are only allowed to acquire up to 250 houses.
The Housing Law also states that in cases where an area with a population equivalent to that of a ward (10,000 people under the draft decree) has multiple condominium buildings or individual houses along a street, foreign organizations and individuals can still only acquire up to 30 percent of the total number of apartments in a condominium building or up to 250 houses.
Under the Housing Law, if a foreign organization or individual acquires a house and this acquisition exceeds the limits on foreign ownership within the area, then the foreign organization or individual is only entitled to the value of the house.
Tenure limits on property ownership
Under Vietnam’s laws governing land use rights, land is collectively owned by the people and administered by the government on their behalf. Therefore, property owners cannot have full and legal ownership of land, and their rights are limited to land use rights permitted within the law. This also applies to foreign organizations and individuals.
Under the Housing Law, foreign individuals can only own a house for a period of up to 50 years from the date of issuance of the Certificate of Ownership. This can be extended once for a period of 50 years.
Meanwhile, the ownership tenure of foreign organizations is limited to the tenure specified in the Investment Registration Certificate issued to that organization, including the extended period. The ownership tenure is calculated from the date the organization is granted the Certificate of Ownership and must be clearly stated on this Certificate.
