“Law on Housing 2014 coming into effect from July 01st 2015 has stipulated new provisions on subjects entitled to own dwelling houses in Vietnam; the type, quantity, and term of dwelling house ownership of foreign entities.“
1. Subjects entitled to own dwelling houses in Viet Nam
According to the regulations of Law on Housing 2014 and Resolution No. 19/2008/QH12 on the pilot for foreign organizations and individuals to purchase and possess dwelling houses (hereinafter referred to as “Resolution 19”) remaining in effect until June 30th 2015, foreign organizations permitted to own dwelling houses in Viet Nam include:
In addition, Housing Law 2014 has expanded foreign housing ownership in Viet Nam. In addition to foreign entities investing in project-based housing construction in Vietnam, the following organizations are subject to dwelling houses ownership: foreign-invested enterprises; branches, representative offices of foreign enterprises; foreign-invested funds and branches of foreign banks currently operating in Vietnam (hereinafter collectively referred to as “foreign entities”).
2. Types of dwelling house which foreign entities are entitled to own
According to the Law on Housing 2014, foreign entities are permitted to purchase, rent and purchase, receive, or inherit commercial housing including apartments and separate houses in the project of housing construction, except for national defense and security areas as prescribed in the regulations of the Government. Whereas in Resolution 19, the type of dwelling houses that foreign entities are allowed to own only consists of apartments in dwelling house development projects.
3. Quantity of dwelling house which foreign entities are entitled to own
Foreign entities without real estate business function have the right to own no more than 30% of the number of apartments in an apartment building; or no more than 250 houses in case of separate houses including villas, row houses in an area whose population is equivalent to a ward-level administrative division.
In the event there are multiple apartment buildings or separate houses in a street in an area whose population is equivalent to a ward-level administrative division, the number of apartments and/or separate houses that a foreign entity is entitled to purchase will be specified by the Government.
In case a foreign entity receives or inherits dwelling house(s) exceeding the number prescribed above, it may only receive the value of that house(s). This is a highlight in the Government’s policy on the ownership of foreign entities when the types of dwelling house that foreign entities entitled to own are expanded.
4. Term of dwelling house ownership applied to foreign entities
Basically, the provisions on term of dwelling house ownership applied to foreign entities still remain the same in Law on Housing 2014. Specifically, foreign entities are eligible for the homeownership as agreed in agreements on housing sale, lease purchase, gifting, or inheritance for no longer than the term stated in the issued Investment Certificate, including the extended term; the term of housing ownership is determined from the date the foreign entity is granted the Certificate and clearly stated in such Certificate.
However, when compared with Resolution 19, Law on Housing 2014 has an extra new point to detail the way to handle expired dwelling houses. To be specific, before the time limit of the housing ownership expires, the house owner is entitled to gift or sell their house(s) to entities eligible for homeownership in Vietnam. If the house owner fails to sell or gift their house(s) by the time such ownership expires, their house(s) shall be under the ownership of the State of Vietnam.
PLF Law Firm