Wanna own property in Vietnam?

Wild_1 wrote:

In Vietnam, no one, other than the government, owns any land.  The so-called Red Booklets (for lands) and Pink Booklets (for structures) are nothing but the rights to use.  That is all people buy, sell or transfer.  Those booklets are good for 50 years, starting in the early '80s; and since none has expired yet, no one knows how the renewal processes will work. 

But, even if your booklet is current and desirable, the State can make it obsolete and worthless in many ways; re-zoning your area, change your classification or your status...  Then, if you are lucky enough to have any value dued to you, it will be a fraction of what you paid.

Legal recourses?  Yeah, submit your grievances to the same people who want your valuables...  You should know the rest!

Howie,

I wonder if my ninety something year old granny knows that or if my mom even knows that they don't own the land?? I am not going to tell her because she will just blow me off and say I don't know what I am talking about! 

I thought the 50-year rule applied only to foreigners leasing land. Didn't know it applied to Vietnamese citizens too. Thought they can lease it indefinitely. Thanks will have to ask my cousin about this when I'm in Vietnam.

Lan,

There are a lot of Vietnamese who don't know these facts; your family there is not alone.

Khanh,

And you want to invest?  You like greater caps??? 

Dude, this is what gets a lot of foreigners and Viet Kieus. 

yes I still want to invest in Vietnam. I'm not optimistic by any chance nor naive enough to know how things work in Vietnam. Someone has to be a pioneer. Instead of listening to all these Vks (which I rarely do) I'll explore my opportunities first hand and weigh the risk to rewards.

If the risk is too great than I can always stay at home listening to my superstitious wife scold me for talking to strangers again.

Government doesn't own land. It belong to "people". Some years ago, they divided into two kinds of certificate; "Pink book" - Certificate for owning asset stick with land and "Red book" - Certificate for long time land using. Mean, at that time, in all transaction involved in your house, you have to show to books "pink & red book".
But from now on, there is only "pink book" - Presented for long time land using and the asset stick with land.
The "land law" is the most complicated law in Vietnam now.
If your house belong to the re-developed zone. There are two cases can be happened. 1- The government takes back to serve public works (to build up hospital, school for children, street or even green park), the compensation will base on the "land price frame" usually lower much than market. 2- the government takes back to transfer to other developer to serve the commercial purposes, the compensation will basing on the agreement between the land owner and developer.

Rosyvn,

Which people are you talking about?  You are really trying to sugarcoat this, aren't you?  The Vietnamese real estate market is tanking, isn't it?

Wild_1 wrote:

Rosyvn,

Which people are you talking about?  You are really trying to sugarcoat this, aren't you?  The Vietnamese real estate market is tanking, isn't it?

Yes I believe so Howie.

Wild_1 wrote:

Rosyvn,

Which people are you talking about?  You are really trying to sugarcoat this, aren't you?  The Vietnamese real estate market is tanking, isn't it?

Of course it's tanking...that's the reason for the proposed changes. 

Even though you are skeptical, you have to admit that many, many Vietnamese (some of whom are personal friends) have made money until the last couple of years by investing and trading in property.  Whether that will continue to be the case, and whether foreigners will ever benefit from any changes is unknowable.  You pays your money and takes your chances...

exactly Richiv. It's called speculative trading. I've made my money this way after the 2008 economy collapsing. People called me crazy and insane for wanting to buy houses while record foreclosures are going on and big banks and companies being bailed out by the government. I've bought 3 houses since 2009.

I want to see if the same can be done in Vietnam while housing prices have declined, partial housing projects being abandoned by foreign companies and an over supply of houses seems like an ideal situation to invest in Vietnam if you've got the straight capital. Just going through the proper channels seems to be the barrier most have with investing in Vietnam.

Well you buy when the market is down but you do it in areas people want to live and the property is yours not a 50yr lease. This so called rezoning is a huge red flag for me, pardon the pun. I can't see a shortage of houses for rent so that tells me rent returns are low for the capital and the chance of losing the property if laws are changed. If its to good to be true its  usually not.

BIGJED1975 wrote:

Well you buy when the market is down but you do it in areas people want to live and the property is yours not a 50yr lease. This so called rezoning is a huge red flag for me, pardon the pun. I can't see a shortage of houses for rent so that tells me rent returns are low for the capital and the chance of losing the property if laws are changed. If its to good to be true its  usually not.

I have found that rental ROI is only about 5% give or take in VN. Not enough for me to dive in!!

richiv wrote:

Wild_1 wrote:

Rosyvn,

Which people are you talking about?  You are really trying to sugarcoat this, aren't you?  The Vietnamese real estate market is tanking, isn't it?

Of course it's tanking...that's the reason for the proposed changes. 

Even though you are skeptical, you have to admit that many, many Vietnamese (some of whom are personal friends) have made money until the last couple of years by investing and trading in property.  Whether that will continue to be the case, and whether foreigners will ever benefit from any changes is unknowable.  You pays your money and takes your chances...

Ask the American and European investors how much money they made after it was all over (pun intended). Knowing when to get out of the market is more important than many other investing strategies.

If your an a foreign investor and not a local VN that is well funded and know all the ins and outs of the law the only way you'll leave VN a millionaire is if you came here a billionaire.

I know a few people who own multiple houses in and around Vung Tau, including my landlord. None of them are renting their houses out to make money off the rental. They plan on making their money on the eventual resale of the house. My wife's aunt owns 6 different houses and lives in one of them. She is renting the others out at just enough to cover loan payments plus a little for maintenance cost.

As I understand it the "50 year rule" only applies to foreigners not to nationals.

Even the sugarcoated interpretation of the Vietnamese land law, by the Vietnamese Embassy in the US, states that "private landownership is not permitted in Vietnam."

The government ("people") owns the land. Everyone leases.

For residential purposes, the lease is "long-term" with no end date.
For other purposes, e.g. farming, the lease is 50 years, but supposedly, you can keep renewing the lease.
Every red book has this information printed out.
A common trick is to buy farm land, hope for rezoning (or bribe your way) to turn it to residential.

What is the real difference between land ownership and land use rights. At the end of the day it means the same. If you can tell me any real differences please let me know because i have been arguing with my wife over this and she has me convinced now that there is no difference.
You could say that the government can seize your land at anytime but they can do that in the west also buy using imminent domain laws.

ngohly wrote:

The government ("people") owns the land. Everyone leases.

For residential purposes, the lease is "long-term" with no end date.
For other purposes, e.g. farming, the lease is 50 years, but supposedly, you can keep renewing the lease.
Every red book has this information printed out.
A common trick is to buy farm land, hope for rezoning (or bribe your way) to turn it to residential.

ngohly pretty much explains it right. On another note, you can buy agriculture zoned land and build a house on it however the size of the home is limited to about the size of a bread box and this type of zoned land cannot be purchased by foreigners, only Vietnamese. Foreigners are limited to residential zoned areas only. Rosyvn mentioned about the red & pink books. The consolidation was suppose to be implemented a few years ago but it's not being done at all levels or provinces. When and if the new decree is implemented in 2014. I would venture a guess that the first purchase by a foreigner won't be finalized and on the books till 2016 or later years. What they pass at the NA level doesn't get down to the worker bee's  in the land offices for a long time. As example few if any know right now that Viet-Kieu with a VEC in their passport can own outright a plot of land and one home in Vietnam, and this law/decree was passed back in 2009/10. Tried to explain that to the friendly folks at our local land office last year when we started the procedures for the issuance of the documents. They stated "That's immigration policy's nothing to do with the land ownership rules" I just tapped my wife on the shoulder and told her "lets go,it's lawyer time".

VungTauDon wrote:

What is the real difference between land ownership and land use rights. At the end of the day it means the same. If you can tell me any real differences please let me know because i have been arguing with my wife over this and she has me convinced now that there is no difference.
You could say that the government can seize your land at anytime but they can do that in the west also buy using imminent domain laws.

i bought 3 pieces of land in Vinh Long.there will be a clause which states that u are entitled to use the land for 20 years..i question about it with my wife,she says that all lands will have this clause,but so far nobody bothers about it as the government did not take back the land by force.

another thing which someone might not know,if your land happens to be on main street,the front few meters does not "belongs" to you as as the government has the rights to use it if they want to expand the road.thats why people usually dont build their house structure on the front.

If you own and live in a 80m2 house in the city, it doesn't matter much. You have de-facto ownership thanks to the "long-term" lease.

Most activists advocate for land ownership out of concern for the rural population. Land grabbing is rampant in the countryside exactly because people have very little rights over their non-residential land. It is very easy for the government to rezone and seize the land without fair procedures involving current users. Users cannot defend their rights (cause they have none) or demand just compensation.

Also, it'd eminent domain. Some countries in the west use it. Others not so much.

Wild_1 wrote:

Rosyvn,

Which people are you talking about?  You are really trying to sugarcoat this, aren't you?  The Vietnamese real estate market is tanking, isn't it?

it definately is..i regret not selling my land 2 years ago when someone make an offer..the price slide 10% as today,wonder how long will it takes to rise back 10% at this current market.

Andy@SH wrote:

VungTauDon wrote:

What is the real difference between land ownership and land use rights. At the end of the day it means the same. If you can tell me any real differences please let me know because i have been arguing with my wife over this and she has me convinced now that there is no difference.
You could say that the government can seize your land at anytime but they can do that in the west also buy using imminent domain laws.

i bought 3 pieces of land in Vinh Long.there will be a clause which states that u are entitled to use the land for 20 years..i question about it with my wife,she says that all lands will have this clause,but so far nobody bothers about it as the government did not take back the land by force.

another thing which someone might not know,if your land happens to be on main street,the front few meters does not "belongs" to you as as the government has the rights to use it if they want to expand the road.thats why people usually dont build their house structure on the front.

Not to correct you Andy but prior to them issuing the ownership documents a team comes out to measure the land. A copy of that diagram  is in the "Red Book" what goes in there is yours. When it's time to do say a road widening as your example, any of that land is what you get paid for if they take any out it. Now, at the time of issuance they  tell you that it's going to be taken back some time in the future and you build on it anyway, than you SOL.

VungTauDon wrote:

What is the real difference between land ownership and land use rights. At the end of the day it means the same. If you can tell me any real differences please let me know because i have been arguing with my wife over this and she has me convinced now that there is no difference.
You could say that the government can seize your land at anytime but they can do that in the west also buy using imminent domain laws.

Land Use Rights and Land Use Right Certificate
Private ownership of land is not permitted in Vietnam and the people hold all ownership rights with the State as the administrator. However, the laws of Vietnam allow ownership of a right to use land.  This right is called the Land Use Right (“LUR”). LUR to foreign investors allows title holders to conduct real estate transactions, including mortgages.
There are three main regimes for investors to acquire LURs from the States:
•    Allocation: The State can allocate LURs by administrative decision to national entities only. Allocated LURs can be subject to a land use fee or not, depending on the cases.
•    Recognition: The State can "recognize" LURs to national entities only, in which case no fee is applicable.
•    Leasing: The State can lease LURs on the basis of a contract to both national and foreign entities. LURs leases are subject to a land use rent and are the only form of land ownership available to foreigners.
Foreign investors in Vietnam obtain LURs (a) by way of a JVC to which a local Vietnamese partner
contribute LUR as capital contribution, or (b) by way of land leased directly from certain permitted lessors such as the State.


Ownership means you "own" it and it is yours to do what you see fit within zoning regulations vs land use rights which means you can "use" the property until the owner has a different idea. IMHO

Wow this is starting to hurt my head. I will have to have a beer to numb the pain.

ngohly wrote:

Also, it'd eminent domain. Some countries in the west use it. Others not so much.

Thanks for the spelling correction, and most countries have some form of "eminent domain"

VungTauDon wrote:

ngohly wrote:

Also, it'd eminent domain. Some countries in the west use it. Others not so much.

Thanks for the spelling correction, and most countries have some form of "eminent domain"

I will gladly compare America's eminent domain history with that of ANY 3rd world developing country!! Consequently I will keep my real estate portfolio where not perfect by any stretch of the imagination but with some semblance of Juris Doctrine recourse.

BIGJED1975 wrote:

Wow this is starting to hurt my head. I will have to have a beer to numb the pain.

Yeah, this hurt my noggin, too!  I had to go to bed, when VungTauDon asked about the differences between land ownership and land use rights. 

Dude, these things went way back, into my college days and the works of Carl Marx and Adam Smith...  If you fellas need to know the specifics, go read them.  We are considered capitalists, and most of Vietnam are considered communists, for very good reasons.

And, just like Solo1, I too would much rather take my chances with the capitalists.

Andy@SH wrote:

i regret not selling my land 2 years ago when someone make an offer..the price slide 10% as today,wonder how long will it takes to rise back 10% at this current market.

It is going to be awhile.  The important thing is how long it will take, or how long you can hold on to them...  But, Vietnamese real estates have no where to go but up.

I would serve them goi cuon if they'd apply eminent domain to my real estate portfolio. Here not only will they pay you above market price but some will also get you a house to relocate to.

Might want to take notice in the link that the draft decree limits individuals to 500 sq meters of land:

http://bizhub.vn/property/2133/experts- … -laws.html

That ain't much land.

going off a tangent but why is everyone changing their avatars/pictures? The originals were better.

khanh44 wrote:

going off a tangent but why is everyone changing their avatars/pictures? The originals were better.

Thanks for reminding me!!

khanh44 wrote:

going off a tangent but why is everyone changing their avatars/pictures? The originals were better.

Well, why not? I not afraid to let people see me with my glasses on!

Oh, no...  Here we go again!  Where is that Anatta, when we need him?

Wild_1 wrote:

Oh, no...  Here we go again!  Where is that Anatta, when we need him?

This is bad news...
Of course, this is good news for expat, people that really want to live there.
But for all other people, this is really bad...
You will have speculation and in no time, nobody would be able to buy a house at a correct price...
We are doomed by rich people everywhere on the planet. They buy everything to make money and they screw everybody then...
Even in my country (Belgium) speculation is so high than houses begin to be hard to buy, even for a couple working...
In switzerland, they have mortgage on several generations now...
So high are the prices....

Here's a link to another point of view on the subject:

http://www.thanhniennews.com/index/page … lysts.aspx

According to new law foreigner Only can buy condo or apartment. not allowed to buy land.

mr.cit wrote:

According to new law foreigner Only can buy condo or apartment. not allowed to buy land.

from my knowledge,it is actually not buy but lease..and only able to lease direct from the developers and not resale.

anyone able to clarify on it?