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Comprehensive Guide to Property Titles and Ownership in Vietnam

Oct 26, 2021

Comprehensive Guide to Property Titles and Ownership in Vietnam

                 

As an emerging economy, Vietnam’s rapid economic growth in recent years has meant a lot more interest in investing in its property market. Like that of many other developing countries, however, the numerous types of property ownership and various rules and regulations around property titles may be a bit confusing for someone just starting to consider investing in this market. Below, we break down the different types of property titles, with some quick explanations on what they are and how to own property in Vietnam.      

How to own property in Vietnam - Get to know the titles

Deposit Agreement

The deposit agreement is perhaps the most basic document you sign when buying a piece of property. The information below covers what the deposit agreement signifies in both the primary and secondary markets!

1. In the Primary Market

When purchasing new apartments off the grid from developers, you have to go through a process that includes a series of installment payments over the next 1-5 years. Depending on the developer and project, these payments are on a schedule that can be as little as 2% every 6 months, to 10% every month, and correlate to additional incremental progress of the apartment project building progress over time

Often, the first such installment involves signing a deposit agreement with the property developer immediately after selecting a specific unit at a booking event.

For these cases, the developer will usually require you to put in at least 10% of the property value as a deposit to “secure your claim” on it.

*Note that depending on the developer’s policy, you may or may not be allowed to sell the apartment after signing the deposit agreement.*

2. In the Secondary Market

When purchasing property from another seller, you’ll often put in a deposit and sign a deposit agreement as a sign of good faith and to “stake your claim” on the property. This is done to show that the transaction will actually happen between both parties - and to lock both parties’ commitments in!

Deposit amounts usually range from 5-10% of the property value - even to 50% in cases where the buyer and seller agree.

Deposit agreements can be signed directly between the parties, prepared by an agent, or notarized at a notary office to be more “official”.

Usually, deposit agreements will contain clauses that dictate:

          + For the buyer, this is usually the loss of the deposit fee they have put in.

          + For the seller, this is usually a penalty equal to the deposit that the buyer has put in.

*This applies to properties that aren’t apartments as well*                                                                                                                      

Long Term Lease Agreement

1. What is a Long Term Lease?

2. Who would get a Long Term Lease?

3. Anything else I need to know about a Long Term Lease to own property in Vietnam?

SPA (Sales and Purchase Agreement)

1. In the Primary Market

After signing the deposit agreement in the primary market payment schedule, the next step would be getting an SPA issued from the real estate developer. The SPA is a further contract of ownership of the property, and includes a promise from the developer that they will transfer a unit to you on a certain schedule, with the specific features, dimensions, and plans of the apartment all clearly laid out.

*For foreigners*

Foreigners are issued foreign SPAs, but if they sell to a local buyer, the title would then be transferred to a local SPA. However, local SPA holders usually have trouble selling back to a foreigner due to the limited 30% foreign quota.

2. In the Secondary Market

In the secondary market, the term Sales and Purchase Agreement, or SPA, usually refers to the document signed at the notary office that consummates the transfer of the property between a buyer and seller.

The SPA will contain the remaining payment for the property that hasn’t already been covered in the deposit agreement (usually 90-95% of the property value)

SPAs are usually signed at a notary office to be made official, and so the notary office can check that the property hasn’t been sold to anyone else or if there are any other liens on the property.

Usually, SPAs will contain clauses that dictate:

*This applies to properties that aren’t apartments as well*
                                                                                                                                           

Pink Book

1. What is a pink book?

2. When are pink books issued?

3. Can foreigners get pink books?


We are here to help

Feel free to reach out to Homebase if you have any more questions about how to own property in Vietnam. Get in touch via phone/Zalo/WA at (+84) 964 245 404 or email at contact@gethomebase.com.

Whether homebuying for foreigners or locals in Vietnam, we can help you with it!

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