Entities eligible and conditions for homeownership in Vietnam

Entities eligible and conditions for homeownership in Vietnam (Source: Internet)

1. What is housing?

According to Clause 1, Article 3 of the Law on Housing 2014, housing means any building in which households or individuals live.

In which, housing includes the following types:

- Separate house means any house which is built on a detached land plot under lawful rights to use of an organization, household or individual, including villas, row houses and detached houses.

- Apartment building means any multi-storey building which has multiple apartments, public stairs, hall ways, private areas, common areas and common infrastructural works for organizations, households or individuals, including apartment buildings for residential use and mixed-use buildings for both business and residential purposes.

- Commercial housing means any house which is built for sale, lease, or lease purchase according to market mechanism.

- Official residence means any house rent by entities entitled to live in official residences as prescribed in Law on Housing 2014 over the duration in which they are on duty.

- House serving relocation means any house provided for households or individuals who have to relocate when the State withdraw land or carry out land clearance as prescribed in regulations of law.

- Social house means any house provided for entities benefiting from the policies on housing support carried out by the State as prescribed in the Law on Housing 2014.

(Clause 2, 3, 4, 5, 6, 7 Article 3 of the Law on Housing 2014)

2. Entities eligible and conditions for homeownership in Vietnam

2.1. Entities eligible for the homeownership in Vietnam

Subjects entitled to own houses in Vietnam as defined in Article 7 of the Law on Housing 2014 include:

- Vietnamese organizations, households or individuals (hereinafter referred to as Vietnamese entities).

- Overseas Vietnamese.

- Foreign organizations and individuals (hereinafter referred to as foreign entities) prescribed in Clause 1 Article 159 of the Law on Housing 2014, specifically as follows:

(i) Foreign entities who invest in project-based housing construction in Vietnam as prescribed in in accordance with the Law on Housing 2014 and relevant laws;

(ii) Foreign-invested enterprises, branches, representative offices of foreign enterprises, foreign-invested funds and branches of foreign banks operating in Vietnam (hereinafter referred to as foreign organization);

(iii) Foreign individuals who are allowed to enter Vietnam.

2.2. Conditions for recognition of house ownership in Vietnam

* Conditions for recognition of house ownership

Specifically, in Clause 1, Article 8 of the Law on Housing 2014, domestic organizations, households and individuals; overseas Vietnamese permitted to enter Vietnam; for foreign organizations and individuals, the following conditions must be fully satisfied:

- The foreign entity prescribed in item (i) is required to have an Investment certificate and have houses which are built under a project as prescribed in Law on Housing 2014 and corresponding regulations of law.

- The foreign entity prescribed in item (ii) is required to have an Investment certificate or a Permission to run business in Vietnam (hereinafter referred to as Certificate of investment) issued by the competent agency in Vietnam.

- The foreign entity prescribed in item (iii) is required to have a permission to enter Vietnam and he/she is not granted diplomatic immunity and privileges as prescribed.

- The Government provides guidance on documentary evidence for entities or requirements pertaining to foreign entities qualifying for the homeownership in Vietnam.

(Article 160 of Law on Housing 2014)

* Forms of legal housing in Vietnam

Entities having legitimate housing as prescribed in Clause 2, Article 8 of the Law on Housing 2014:

- Vietnamese entities who invest in housing construction, purchase, enter into lease purchase agreements, receive gifts, receive inheritance, receive capital contribution, exchange houses, or make other transactions prescribed in regulations of law .

- Overseas Vietnamese who enter into agreements on commercial housing purchase, lease purchase with enterprises or cooperatives conducting real estate trading (hereinafter referred to as real estate enterprise); agreements on housing purchase, gifting, exchange, inheritance with households or individuals

Agreements on residential land transfer in the project on commercial housing construction which is permitted to divide the piece of land into smaller lots/plots for sales as prescribed.

- Foreign entities who enter into agreements as prescribed in Clause 2 Article 159 of the Law on Housing 2014 shall be approved, including:

+ Invest in project-based housing construction in Vietnam as prescribed in Law on Housing 2014 and corresponding regulations of law;

+ Buy, rent and purchase, receive, or inherit commercial housing including apartments and separate houses in the project for housing construction, except for areas under management relating to national defense and security as prescribed in regulations of the Government.

3. Cases of issuance of certificates for housing in Vietnam

Cases in which a Certificate is issued for a house is specified in Article 9 of the Law on Housing 2014 as follows:

- If any organization, household, or individual is eligible for homeownership and has legitimate housing prescribed in Section (2), the house shall be granted the Certificate of land use right, homeownership and property on land (hereinafter referred to as the Certificate). The house which is granted the Certificate must be an existing house.

Procedures for issuance of the Certificate to the homeowner shall comply with regulations of law on land.

- With respect to the fixed-term agreements on housing ownership prescribed in Clause 1 Article 123 in Law on Housing 2014, the buyer shall be granted the Certificate within the term of the agreement;

When the contractual term of the agreement expires, the homeownership shall be retransferred to the initial homeowner;

The issuance or expiration of the Certificate shall comply with regulations of the Government.

- The competent agency in charge of issuance of the Certificate must specify housing type and housing class in the Certificate as prescribed in Law on Housing 2014 and law on construction; specify floor area and usable area regarding the apartment building; specify the name of the residential construction project approved by the competent agency regarding the housing in such project.

- The Certificate of any house in the residential construction projects for lease purchase or sale purposes shall not be granted to the investor but it shall be granted to the lessees or the buyers, unless the investor wishes to be granted the Certificate pertaining to the house which is not under any agreement on lease purchase or sale;

If the investor builds houses for lease, such houses shall be granted the Certificate.

- In case the household or the individual has a multi-storey house whose each story has at least 2 apartments satisfying requirements prescribed in Clause 2 Article 46 in Law on Housing 2014, the competent agency shall grant the Certificate to every apartment in such house.

4. Time to transfer house ownership in Vietnam

Specifically, in Article 12 of the Law on Housing 2014, the time to transfer house ownership in Vietnam is prescribed as follows:

(1) With respect to any agreement on housing sale not prescribed in item (3) and any agreement on housing lease purchase, the homeownership shall be transferred from the date on which the buyer or the lessee pays off the total amount and receives the house, unless otherwise agreed.

(2) With respect to any agreement on housing capital contribution, gifting, or exchange, the homeownership shall be transferred from the date on which the beneficiary of that agreement receives the house.

(3) With respect to any agreement on housing sale concluded between the investor and the buyer, the homeownership shall be transferred from the date on which the buyer receives the house or from the date on which the buyer payoffs the total amount to the investor. With respect to any agreement on commercial housing concluded with the real estate enterprises, the homeownership shall be transferred in accordance with law on real estate trading.

(4) With respect to housing inheritance, the homeownership shall be transferred in accordance with law on inheritance.

Thanh Rin

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