A Layman's Guide to Buying Property in VietNam

Hi Jaitch. Appreciate the time and effort you put in to write this post. Thanks for the heads-up.

LAND REGULATIONS
The land regulations in Vietnam are complicated and very different from land regulations in many other jurisdictions. Land in Vietnam belongs to the state. Generally, land is leased to FICs (Foreign Invested Companies) for individual, licensed projects and for designated purposes and is therefore specific to each FIC. In general, land is not freely transferable.

An FIC may lease land for the duration of its investment licence or investment certificate based on a decision by either the Prime Minister or the relevant People's Committee. lternatively, and more flexibly, an FIC may choose to lease or sub-lease land in a zone through a lease or sub-lease with the zone developer.

At its own discretion, an FIC may elect to pay land rental for a whole lease term in one lump sum or to pay land rental annually. The method of payment affects the rights of the FIC over the leased land and, in particular, over the land use rights (“LURs”) with respect to the leased land. Most importantly, a land user who pays rent in one lump sum has more extensive rights over its LURs, such as to mortgage the LURs (and any building on the land), to use the LURs to provide guarantees and to use the LURs to make capital contributions in the form of the LURs. A land user who pays rent annually, by contrast, does not have these rights with respect to its LURs.

While land in Vietnam cannot be privately owned, foreign investors can own, during the term of the land lease, buildings erected on the land. All legitimate land users are entitled to obtain land use rights certificates in their name.

Similarly, all legitimate owners of property or buildings constructed on land are entitled to obtain certificates of property ownership. These certificates constitute conclusive evidence of the rights of land users and property owners, and provide the basis for the users to exercise their rights, such as to transfer, to mortgage or to dispose of their land use rights or properties.

Almost as clear as mud.

Dear Jaitch,

Thanks for the very useful information. I am actually keen to invest in HCMC but is very worry about the red tapes and the politics. I am from Singapore wanting to settle down in HCMC.

I hope I don't need to see a psychiatrist to continue with this. I noticed you mentioned the following:

Can Foreigners actually acquire User Certificates?
The answer is a qualified Yes.

Foreigners can:
(1) Acquire User Certificates in Ha Noi, Da Nang and HCMC - at the moment;
(2) Hold the User Certificate for 75 years at which time it, and the buildings on it revert to the PC and the former owner gets nothing.

I have only 5 questions to explore this further else I will drop the idea and save my money going to see a psychiatrist!

1. Do I qualify as a foreigner?
Assuming if I qualified,
2. 75 years is good enough if what I want to do can recover my investment say in 10 years.
3. Can I sublet the land?
4. Can I sell it back to a local, say in 11 years later?
5. If yes, Do they reset the Certificate, in this case to local ownership?.

Hope to have your valuable advise. Thanks

Hi Michael:

You asked:
1. Do I qualify as a foreigner? Any person not born in VN or not having acquired VN citizenship is a foreigner. Singaporeans are Foreigners.

2. 75 years is good enough if what I want to do can recover my investment say in 10 years. Unless you remove added assets they, too, reverts to the State.

3. Can I sublet the land? Yes, and even pledge it as security.

4. Can I sell it back to a local, say in 11 years later? This was under discussion when Foreign ownership was brought in.. It appears the answer is Yes, an experienced lawyer can confirm.

5. If yes, Do they reset the Certificate, in this case to local ownership?. Apparently so. A User Certificate can be conditioned every which way, which is why only experienced cities have the Foreigner owned provisions. I live in DakLak Province and their land rules are set by National Government, wi.

Let me illustrate it with our two condominiums above. One is a VN developer who divides his master User Certificate into many and sells them to unit owners with the units.

The overseas developer rents his land, these days from a government owned developer leasing company, which means technically it is foreign 'owned'. The developer builds and then then sells the real property, i.e. condo's, and the city carves up the land and sells User Certificates to real property unit owners.

It sounds crazy but I have developed a great respect for VN governments as they introduce innovative ways to achieve their goals. Their goal, in this case, is to ensure even the poorest citizens, farmers, can get land. Singapore might appear to be a model form of government but VN has achieved so much in 35 years but the paperwork is a killer. And every form is an opportunity for a bribe.

Dear Jaitch,

Thank you very much for the reply. I am getting to learn more so that I can make better decisions when doing business and investing in Vietnam.

ALWAYS, but always control your money.

Many Foreign investments fail because they trusted the wrong people.

Jaitch wrote:

ALWAYS, but always control your money.

Many Foreign investments fail because they trusted the wrong people.

Indeed. Thanks for advise. I heard many stories regarding this and have friends caught in this situation.

I will be taking my time to do that... no hurry to rush in.

Updated with:

When is a condominium NOT a condominium?

can you tell about the taxes involved when buying home...also yearly after purchased...thanks brett

Different provinces - different rates.

Note. This post above was just to give Foreigners a heads up on VN procedures. Always use a lawyer.

Civil law is very weak here so don't assume anything as for protection, Both Hai Phong and Da Nang have had ';and wars' where the Peoples Committees arbritarily tried to snatch land back. Getting as bad as China.

Thank you for the great advice.

Any advice on borrowing money from Vietnamese banks (or banks of your home country - UK) to purchase a property?

Thanks in advance.

No bank outside VietNam would likely touch it and in VietNam they might - depending on the property and your assets.

Jaitch

I have a friend who visits Hoi An regularly and is very friendly with a developer who is building some units on the river. They are going to purchase a unit and we were thinking of doing the same. Is it possible for an Australian to buy one of these units without meeting any conditions (business, residency etc). If so is the lease term 50 years or 75 years or 99 years. The developer has given documents which state a 99 year lease. Also can I buy in the name of a Super Fund with Individual Trustees? Is there someone you could advise using in regards to advise and legal guidance with the above if it is at all possible. TIA

Every province has different schemes, and the laws change constantly. The whole country, with the exception of the large cities [TP HCM, Da Nnag, Ha Noi] have to follow the national rules.

I haven't heard of this "Super Fund" but it could be called something else.

One part of the law says Foreigners can't own "houses" (aka "villas" - houses with some garden i.e. not lot line construction), but I know of an island where all the developments are villas and Foreigners buy them - legally.

The River Thu Bon is not the most salubrious of locations.the Heritage Life Centre is on it, as it is where the raw sewage from Hoi An and smaller communes further upstream gets dumped.

Sewage attracts mosquitoes and ...

The other thing, especially easy to check at this time of year, is flooding - either from the river or across your property in to the river. It's not the slow soaking water from the river but the massive torrent from the land which does real damage.

There are some rental properties just outside the city limits, between the Cua Dai Beach Road and the river. One owner, of several properties, speaks fluent English and he could tell you about river conditions.

The Qung Nam Province offices are in Hoi An and they can answer foreign ownership questions.

You have to speak to a lawyer, who hopefully is not first cousin to the developers lawyer, who can answer your Land User Certificate questions. Never hand any money over until you are very satisfied.

Better to lose a house buying opportunity than your money.

I inhabit DakLak Province and TP HCM so I cannot help you with regard to conditions there. Remember, if you consult a Da Nang lawyer, that cities rules are different!

jaitch,
can you point a newly wed viet kieu in the direction to rent a spot here. ive been looking at some places in district

im a hella newbie.

much thanks

In most countries, the old maxim: "Location, Location, Location" applies but this is VietNam and, like many things, it an be different.

Zoning

VN has a form of zoning but, as looking around will prove, it doesn't stop commercial/industrial enterprises from popping up in the middle of residential areas.

Choosing your spot

Buying here is dictated by some odd requirements. Traffic patterns, noise (different in the day, in the night and in the weekends), flooding, etc.

Flooding, to me, is a real bummer, especially as the water is not just rainwater but also sewage, raw sewage. Not only that, it comes into the property through the drains! (This can be prevented/slowed by fitting anti-backflow flappers at the property line).

I have always bought for rebuilding in TP HCM: buy a dump and rebuild, so my criteria have been different to an occupier.

Air rights

Another thing is air rights. People jealously guard their air rights, but are happy to use yours. This means you should get a surveyor check out even a built property to see if everything is on the level. Easier to have a vendor tell a neighbour to pull his air-conditioner, building extension in than you as a new neighbour.

I'll give you an example. In Hue, on Nguyen Tri Phuong Street there is a school and next to it is a hotel.The hotel is built to the lot lines (i.e. no space around the building. They installed air-conditioner and they protruded about 15 centimetres beyond the building, and the property.

Under them was a flower bed of the school, then came the playground. I was there when the headmaster, not the Peoples Committee, came storming around and spitting from his mouth he demanded they be removed.

All mod cons

Benefits with new or re-built properties is that you can effect economies. Double roof to keep the sun off the interior ceilings, insulation, sun-well, etc.

Old buildings being done up require jackhammer's, noise and dust, etc.

New developments, new traps

There are some new developments about to come on-line. Quan 2, in the former swamp, immediately opposite the Majestic Hotel, is a truly massive land clearance site. They have moved hundreds of thousands of people, flattened all the houses (legal and illegal) and, for a year, pumped sand into the swamp and 'dried' it out.

If you take the Thu Thiem Tunnel and immediately take a right before the toll plaza on the Q side, this service road takes you back through the reclaimed area. Get out of your vehicle on any day, walk onto the sand and dig a hole about 20 centimetres deep.

The water you see filling your hole is described as the water table: this is the water in the ground that finds it's natural level. Not good. Concrete houses can actually float in ground water.

If you drive along this service road, when you get to the intersection with the new highway, you have to go up a hill of about 3 metres in height.

This is just above the potential flood level, by about a metre. This means the building ground for thousands of new houses is about 2 metres under the flood levels expected in the next 50-100 years.

Won't be around then, so it doesn't matter? A small flood of 30-40 centimetres will greatly change your lifestyle.

This means that even new developments can't be taken at face value.

Back to Hue. The southern limit of Hue is called An Cuu and the city set aside farmland, surveyed it and marked it out with roads, building lots, etc.

If you want to see the layout, just make sure you don't go in the flood season, the area, surrounded by rivers, floods to about 50 centimetres NOW, let alone in the future when they might be higher.

So choose your site carefully and do your research.

Clear title

Not so bad as it was immediately after the American War, ensuring you have a clean User Certificate is essential. This is your lawyers job. Remember, when the city wants to do urban renewal they freeze User Certificate transfers, except to themselves. Ha Noi used compulsory purchase type action, TP HCM uses the war of attrition and more money to hold outs.

Condominiums

IMO, you should never, ever, buy a condominium which is unregistered. Happens here all the time. Your treasured Red Book means the taxes have been paid.

Those that take the risk are often on the wrong end of a developers tax bill. No pay, no Red Book! And do they care?

Lawyers

Lawyers are your protection. They are supposed to put your interests first, but this doesn't happen. Always. Especially in VietNam where there is so much bribe money sloshing around.

Never seek or take the advice of the builder or developer of any house you in are buying. Sounds obvious but how many people know lawyers?

The lawyer needs to be an extension of yourself; I like mine mean you might like someone more mild. They are better if they work in the area where you are buying a property as they will know the User Certificate people. As well as who, and how much, to bribe.

District 7

I have a branch office in Q7, so I know a little about it. The question is where in Q7.

There are a lot of waterways in Q7, doesn't take much more than a storm at monthly high tide for water to be all over the place.

The biggest problem with Q7 is reaching downtown. There are two main routes, both go through Q4 and both are bad at rush hours. And unlikely to get better.

You also can pay dearly for those three letters: PMH.

Then there is that huge mess called Nguyen Van Linh, who ever heard of putting a 12-laine Expressway through a planned village or sub-division?

If anyone tells you the air is cleaner out there, the only thing there is less of is the particulate count from motorcycle exhaust.

Each and every day shipping traffic plies the waters of the River SaiGon en route to the docks and, depending on the tide, the loud ships sirens can create quite an impressive noise. Especially at night. No ban on sirens between 22.00H and 05.00H like vehicles.

There  is another new area under development further along the NVL Expressway, towards Binh Chanh. At least you have the NVL Expressway and Q4 for downtown!

Real estate agents are like lawyers, and not even necessary. Many deals on existing property are done privately. Remember, an Agents commission comes out of your pocket.

I have PMed you the name and number of one I know to at least be honest.

thanks jaitch

chillinvietnam wrote:

... its seems there is a glut of property especially apartments/condo's unsold with more just sitting.

As I said, you can't get a Red Book for a condo until it is registered. These are standing empty because there are no buyers ... and few decent mortgages.

Pne person  I know bought a bare concrete space in a condo, put the money is an escrow account, and simply finished the space himself. No Red Book (yet) and ot even a Pink Book - just roughing it on a building site!

There is another unfinished condo, where the two first levels were sold for USD$1,250,000. Again the buyer had to complete.

Just too many hassles, plus the Cong An sniffing around.

chillinvietnam wrote:

love to buy a piece of property and build, maybe some recommended contractors? I'm not much of a builder.

You can't "buy" land in VietNam.

Becoming your own contractor is a who;e different challenge. I've been there, and done that!

so how hard is it to build since you done that. care to share?

First of all you have to know what you want and what you can achieve.

I have experience in construction as a project manager for an international communications company where we would go into a remote area, clear a space and then built the equipment rooms, etc.

If you want to D-I-Y here in VietNam the easiest route is to buy a 'wrecker' and you avoid a lot of permits, bribes, etc.

Key building factors

It is my experience that building application examiners concentrate on the 'engineering' aspect of the building - the concrete skeleton and the foundations.

Buildings here are much heavier than say North America where wood reigns; they are less heavier than European construction where tile roofs and brick/thermalite blocks are used in the internal dividing walls.

Drawings

There are two ways of drawing buildings, IMO. One way is to do detailed drawings for every floor which, at VND200,000 per square metre, an mount up.

The other way is to detail the foundations and the concrete skeleton with a generic drawing that covers every floor the only 'special' floor being ground and roof.

The detailed drawings for Rebar, stairs, etc can be separate but they cover all instances.

I then do simple drawings showing room layout, no fancy stuff showing every detail.

Plumbing and Electrical

Again, these are simple line drawings.

I used a CAD program, and even a printed circuit board layout program. Change the titles and the plan examiner knows nothing.

All plans have to be waived, I mean examined, and stamped by an architect.

My first mini-hotel was made from shipping containers and the mechanical engineer was key. He proved, mathematically, the project was stronger than concrete. There was only one change, the city required the basement be dug a little deeper because of the water table.

Light-well

The biggest negative about no side windows is the dark. If you can always include a "light well" which starts at the roof and drops right through the middle of a side wall and terminates at the ground floor ceiling. Upper rooms adjacent to the 'tube' can have windows that open into it.

Roof

Have a double roof. The ceiling of the top floor is usually the roof. Place a second roof about 30-40 centimetres above it, leaving the sides open. This means the sun will beat down on the upper roof and the hot air under it will be vented. Cheaper than air-con in the bedrooms.

Trades

Concrete, Rebar, tiling, carpentry, bricklayer trades, are good. Plumbing and Electrical are bad. Really bad.

Concrete
Mixed on site or premix. I insist on premix for 'columns' (professionally they are 'posts'), floors, foundations and stair cases.

Local site mix for parging, sewer work, etc - non-load bearing.

The only hassle with premix is that it has a determined 'life' after which it's guaranteed properties no longer apply. Traffic jams in TP HCM cause premix to age before delivery, so they do it at night. Neighbours loooove those concrete pumps overnight!

Concrete prices vary depending on local construction demands. I had some pads and drive ways to lay - I told the premix company I would buy 'stale' concrete at the right price. The alternative is they drive to Cu hi and dump it.

Rebar

Rebar is a 'spot' market, the prices shift and, and down, weekly. so buy all your needs in one or two buys. Have it delivered straight, on a truck, not on a three-wheeler, bent in a U-shape.

Conduit, cabling and plumbing

Supervise it's installation, put "pull-through" strings through all  electrical conduits. This stops electricians cheating and besides, anyone can put conduit it.

I put a junction box in every room near the door and a breaker-box on each floor. These are all fed from the main breaker box.

Don't forget safety loops (thin stainless rod) tied into the ceiling Rebar to hang fans. Also think of air-con units - there is a 17 foot limit between the internal and external units imposed by the CFC gas piping. You need conduit / piping for gas (2), condensation (1) and electrical (1).

Don't forget cable TV, telephone and computer wiring conduits.

An inspection 'T' should be put wherever the sewer stack passes through a floor. Vent the stack through the roof.

Gas (cooking)

I hate gas bottles in the kitchen. You must have a large diameter pipe through which the gas line goes. Safety, you know. I built a a small cubicle in the front of the house with a stainless grid for a door. Fresh air - safety.

Supervision

You need supervision, either hired or yourself.

Nightwatchmen

Cheap - just build a hut and supply water and electricity. And a TV or radio.

Hey guys, would you recommend buying an apartment/condominium for around 1 billion VND or under but relatively close to the city, or should I use that to buy a small (crappy) house further away from the city centre?

We have a family home in D1 but for privacy reasons I still prefer to have my own dwelling.

Hey Jaitch, you unselfishly gave a lot of advice freely on this forum. Although a lot of info may be gotten from Internet these days, not all have the time or space to do that.(people are just lazy by nature). That was really a very valuable piece of write-up on property and stuff. Also, the bit about house construction seem like really experieced stuff, bravo! Now,  I have to seriously check whether my spouse's condo has been registered or not! Cheers.

YES I SECOND THAT .. THANKS I HAVE READ YR ADVICE SEVERAL TIMES.....IS IMPORTANT TO SHARE,THE BEST ADVICE IS FROM ANOTHER EXPAT WHO HAS BEEN THRU IT....REGARDS BRETT

Hi mok199!

Please avoid posting in caps lock on the forum

Thanks
Armand

Sploke77 wrote:

... Although a lot of info may be gotten from Internet these days, not all have the time or space to do that...

Glad it was of use.

I often work shifts covering our company clients online technical support desks on the InterNet so certain times of our days are pretty slack. Better than looking at pix of females. (I'm happily married)

I find planning and construction fun ... then I often sell and start all over. Love knocking down those dirty old buildings.

Jaitch, so glad to see your response. The similarity I find in your comments is that ' I am happily married' as so am I. It's darn vital because in a place like charming Vietnam with all its beauties, the males are inevitably tempted in various ways. I had relatives who came here, fell into the trap of the 'charming female business partner' ; threw all his life savings in a venture and got screwed. Penniless, no option but to return home and start from scratch! Tragic isn't it? So beware the 'unwary', check very very carefully before you sign anything because there is really no proper law here only whether You have powerful connections or not!! Next time when you have a house to knock down, reserve a sledge hammer for me. Cheers

I don't even keep any money here, only enough for six weeks.

There have too many sad cases involving Vietnamese marrying Foreigners. VN family members 'kidnapped', or having an expensive fatal disease.

All the User Certificates for my families properties include provisions that no sale, transfer or pledge is valid unless signed by both spouses, and witnessed by a specific lawyer. My wife, who has university degrees, also appoints me as her irrevocable property manager.

Our lawyer says these conditions are as good as a 50-50 North American marriage contract.

thanks a bunch jaitch. im still young and most of your posts are like gold. i have learned plenty and at least i have a foundation now to build from.

hey jaitch

i re read the post and it just dawn on me. the container idea is brilliant. structurally did you still concerete the sides of the container too? what are the measurements of the container. and how high did you go?

Containers are 20 or 40 feet in length, 8 feet wide and either 8 feet tall but a special tall version is 9 feet.

The floor is fitted with thick wooden planking AND it is usually impregnated with pest killer of the strongest type and smells.

I had mine steam cleaned.

From the basement units to the latest top of my mini-hotel is now 6 units high = on the sides and rear. Originally they were only 4 units high, but whose counting.

Note: The column/pads on which they rest have to be strong enough to carry the load. All mine were checked with a construction laser (they can hang upside down and spin). The containers were levelled using 20 by 20 centimetres of steel plate.

The containers were welded where they met at the corners - I used a welder who can weld heavy steel plate.

Where to buy? Usually there are plenty around the place - drivers can get them and they cost me around $500 each average. Make sure yours aren't bent or damaged.

tell me you got pictures.

Sure do, but I have never figured how to post on this site from my hard drive.

Hi Jaitch,

Thanks so much for sharing your knowledge. Can I ask a few questions, sorry if it has been asked :

1. Foreigners can buy landed house or condominium, provided they hold valid work permit and temporary resident card ?
2. Can foreigners buy from private Vietnamese citizen or have to buy from developers ?
3. Does anyone know the proposed metro line 1, from District 9 to Ben Thanh ?  Where are the proposed stops and when is it realistically be completed ?

The article was written deliberately omitting that might tempt people to 'do it themselves'. Additionally a several laws/regulations have changed since this was posted. Note different regulations apply to different provinces/cities.

1. Condominium - yes. Free-standing houses (houses with land are called 'villas') is dependent on the province. Some Foreigners have claimed to have a house (building) in their name. I know this won't happen in TP HCM presently.

2. You can buy from a registered owner subject to 'liens'/conditions. But, please check to see if it is a registered condominium (ask to see an EVN electricity bill addressed to the owner). Condominiums have Land User Certificates, Property Registration and a Certificate from the Condominium Corporation.

3. What will the weather be like twelve months from now? You can rest assured that all the 'connected' (bribers) are already in on the deals. No one knows the final details.

This why you need a lawyer. If VNese scam VNese you can bet you are even more vulnerable.

Transit systems

If you want to know transit routing. See: < http://www.itpc.gov.vn/investors/opport … anguage=en >, < http://en.nhandan.org.vn/cmlink/nhandan … n-1.358236 >.

Plans are as solid as sketches on a sandy beach, things change and are influenced by the financiers, the lenders, etc. Given that parts of the city are increasingly at risk to flooding, all manner of things can happen.

All over TP HCM, city projects are frozen for lack of funds - cleared lots are rented for parking. I know one, near Nguyen Chi Thanh and To Uyen, where all the automotive markets were going to be concentrated, is on hold and rented as a coach parking lot and shipping collection point. Rents for USD$4,000 monthly.

I recently heard of a proposal that a commuting cable car system be used for areas prone to flooding - stations can be anywhere under the cable. A station is simply a concrete pad, with a shelter and a couple of support pylons (the main cable is always moving, the cable cars clamp or unclamp on to the main cable to move or stop).

Thanks

thanks again for the tip jaitch.

My wife is Viet kieu. She is interested in dual citizenship before acquiring a place to live. Any suggestions on where to start would be appreciated.  Thanks

You should start a new thread instead of following this old post. Seems like the user 'Jaitch" is not in this forum long time!
Really he was an encyclopaedia about Vietnam. We will miss him!

Jmcgee1 wrote:

My wife is Viet kieu. She is interested in dual citizenship before acquiring a place to live. Any suggestions on where to start would be appreciated.  Thanks