Vietnam could open property market to foreigners

Vietnam’s Prime Minister Nguyen Tan Dung has thrown his support behind proposals that would make it easier for foreigners to buy homes in Vietnam in an aim to resuscitate the struggling property market and resolve bad debts, Thanh Nien News reported.

Dung instructed concerned agencies to continue amending laws to create an environment most conducive to would-be foreign home buyers here in Vietnam. Since August 2013, Vietnamese lawmakers have been debating draft laws that would allow foreigners to buy more than one apartment unit, secure apartment leasehold rights for longer than the current limit of 50 years and buy land.

The ministries of construction and planning and investment have also pushed for relaxing the laws in a bid to add more liquidity to an ailing real estate market that has been frozen by a bad economy and soaring inflation.

The property freeze has also aggravated banks’ problems with non-performing loans, prompting a vicious cycle in which banks have dramatically cut lending, slowing property sales across the country and stalling many real estate projects.

In a report sent to Prime Minister Dung by the Ministry of Construction last July, the ministry proposed new regulations that would allow organisations like foreign investment funds, banks, Vietnamese branches and representative offices of overseas companies, as well as all foreigners who have a visa to the country that is valid for at least three months, to buy homes – both apartments and independent houses – in Vietnam.

But diplomatic institutions, NGOs, and their employees would not be allowed to purchase homes in the country, according to the proposed regulations.

The ministry also proposed that foreign organisations and individuals eligible for home purchase in Vietnam be allowed to buy different types of properties, including townhouses and villas with less than 500 square meters of land and apartments.

These properties could be leased if their foreign owners are not living in them and the houses could only be sold or given as gifts 12 months after the ownership certification is granted, if the ministry’s proposals become law.

Under a law that took effect on January 1, 2009, foreigners are allowed to buy apartments, but not houses, and each individual or organisation can own one apartment that cannot be leased or used for other purposes except living.

The ministry put forth two options for individual purchasers. Under one, foreigners could buy any number of housing properties, and under the other, the number would be limited to one or two. The number of houses an organisation can buy would depend on the number of foreign employees it has.

Among the most significant changes in the proposals are the two options for the duration of ownership of housing properties by foreigners. The regulations would allow ownership for 50 years with the possibility of a 50-year extension, or 70 years with no extension.

The National Assembly has yet to set a date to vote on the ministry’s proposed regulations.