Oct 26, 2021
Every real estate transaction in Vietnam comes with plenty of documents and paperwork and can be a confusing process, especially for many that's trying to find out how to buy an apartment or property in Vietnam. Homebase totally understands the potential difficulty with this important purchase, which is why we've put together this guide to help you out.
This article will take a look at Vietnam's real estate market in 2021 and tackle the issue of buying real estate in the secondary market.
The primary real estate market consists of the real estate products that are traded and issued for the first time. In Vietnam, most people associate buying primary real estate with purchasing an apartment, house, or piece of land directly from a real estate developer. Read more about the primary real estate market here.
The secondary real estate market consists of property that are traded after the first transaction. This can be townhouse, apartments, and even land parcels, as long as it is not its first transaction.
How to buy an apartment in Vietnam in the secondary market? When you transfer a property, this means transferring the right to own and use the property from the previous owner to the buyer.
There are 2 types of properties in the secondary market:
Each type of property has different features in the Vietnam's real estate market in 2021.
Step 1: Making a deposit
When the buyer and the seller have agreed on all issues related to real estate transfer, then a deposit will be made by the buyer.
This is the first official payment made by the buyer to the seller, usually around 10% or 15% of the total purchase price; it is used to secure the property transaction agreement.
Usually, a deposit payment is made at a notary office, after notarizing the deposit agreement. More information on deposit payments and deposit agreements can be found here.
Step 2: The Sales and Purchase Agreement (SPA)
After the deposit has been made, both parties move on to sign the SPA, usually within 30 days of signing the deposit agreement.
A written and notarized SPA is required under Vietnamese law; you should not rely solely on verbal or handwritten agreements.
Step 3: Transferring the title and paying taxes
After signing the SPA, the buyer will have to bring the relevant documents to the Ministry of Natural Resources and Environment to transfer the title of the property and the pink book to the new owner. Read more about the pink book here.
Both the buyer and the seller are liable to pay taxes when transferring the real estate. The buyer is required to pay a registration tax (0.5% of the property value), and the seller has to pay personal income tax (2% of the property value).
In some cases, the property being purchased has not yet been issued with a pink book. This might be because the property was only recently purchased on the primary market and the property has not reached the appropriate stage of completion for the project developer to apply for a pink book.
In these scenarios, the property was purchased on the primary market via an SPA between the original buyer (Person A) and the developer. When the second buyer (Person B) wants to purchase the property from Person A, the process is slightly different.
Step 1: Transferring the SPA contract
Person A and Person B will go to the notary office to sign the SPA contract. The following information will be included in the contract transfer.
Do note that 7 copies of this SPA transfer contract will have to be notarized at a notary office.
Step 2: Paying taxes
After Person A and Person B complete the notarization of the transfer document, they will both have to pay taxes.
The buyer, Person B, is required to pay a registration tax (0.5% of the property value), and the seller, Person A, has to pay personal income tax (2% of the property value).
Step 3: Apply for confirmation from the developer
After notarizing the transfer contract in step 1, the buyer will have to submit the following documents to the developer to confirm the transfer:
The developer is then responsible for certifying in the SPA transfer contract within 5 working days. After which, the developer will hand over the following documents to the applicant (Person A):
Once these documents have been handed over, the transaction is complete, and the buyer (Person B) is now the official new owner of the property.
After completing these documents, the transaction is considered complete and the buyer is the official owner of the property.
Shopping for real estate in the secondary market can be a risky but rewarding process! Homebase is here to help you get your dream home, regarding the current situation in the Vietnam's real estate market in 2021. We significantly cut short this ownership process so that you'll own an apartment in Vietnam sooner.
Are you curious about our innovative homebuying solutions! We're available for any questions you might have at phone/Zalo/WA (+84) 964 245 404 or email email@example.com.
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