UNDERSTANDING VIETNAM HOUSING LAW
New Vietnam Housing Law with effective from 1st July 2015;
Foreigners who are permitted to enter Vietnam legally are now eligible to buy/invest in Vietnam Property
Foreign Ownership cannot exceed more than 30% of the total units in one apartment building
Ownership title will be on 50+ years leasehold (extendable subject to applicable laws)
Foreigners are allowed to lease, mortgage, contribute as capital gift etc
Taxes and Other Charges
Value Added Tax: 10% of apartment selling price
Sinking fund: 2% of apartment selling price
Registration Tax for Ownership Certificate: 0.5% of apartment value
Personal Income tax (Resale): 2% of transacted value
Person Income tax (Rental income): 5% VAT & 5% Personal Income Tax on revenue
Business License Tax: VND 1million per year if rental income exceeds VND1.5million per month
Management Fee: As applicable
Car park fee: As applicable
VIETNAM PROPERTY INVESTMENT GUIDE PART 1:
Very First Mover Advantage at Entry Price into Vietnam with the changes in the housing law with effective from 1st July 2015 that allows foreigner to own a property in Vietnam
2. Property Prices have bottomed out and is on course to rise over the next few years
3. Golden population structure (More than 70% are of labour age – 18-64 years old) with a total population of 92 million.
4. Fair and Attractive Business Environment for Foreign Investors.
5. Securing Social-political stability (Strong GDP Growth – expanded 6.9% in 2015). GDP is expected to growth at +- 6 to 7% over the next few years with Vietnam tipped as the next investment frontier of Asia
6. Increasing Foreign Direct Investment into Vietnam. Vietnam’s foreign direct investment rose 120% year over year in the first quarter of 2016, the country’s statistics office says. Samsung Electronics(SSNLF), has made an $11 billion investment in production there
7. Vietnam’s sound Economic Fundamentals and Political Stability and is forecast to be on a strong growth trajectory. Property Prices are expected to appreciate 5-7% per annum over the 3 years. Even if the property prices rose 30 percent over the next 3 years, it is likely that the home price to income ratio would be stable.
8. GIC signs MOU to buy 7.73% stake in Vietnam’s largest bank – Vietcombank which reflects the confidence in Vietnam’s long term growth potential
9. Integration of AEC – Asean Economic Community
10. Property Prices are still relatively low as compared to other countries which presents an investment opportunity for investors looking for higher return on their investments.
11. Singapore Listed Developers – Capitaland and Keppel Land has already ventured in to both HCMC and Hanoi.
Stay Tuned for Vietnam Property Investment Guide Part 2 – Coming Soon
Disclaimer: This article is meant for research and educational purposes only. All information, especially property ownership laws, are subjected to changes and no responsibility shall be held on the accuracy. All sorts of property investments can be risky and investors are expected to perform their own due diligence before committing into any purchase.
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