Foreign Ownership of Housing: Issues to be Resolved

Since early July, the 2014 Housing Law has officially come into effect. One of the most discussed aspects of this law is the provision allowing overseas Vietnamese, foreign organizations, and individuals to purchase and own houses in Vietnam.

The law has facilitated the purchase of houses by foreigners. However, to ensure transparency and ease of application in real life, there are still many issues that need to be resolved.

According to the regulations, "Overseas Vietnamese must be allowed to enter Vietnam" (Clause 1, Article 8).

"For foreign individuals specified in point c, Clause 1, Article 159 of this Law, they must be allowed to enter Vietnam and must not be entitled to diplomatic or consular privileges and immunities as per the law" (Clause 3, Article 160).

"Foreign organizations and individuals can own houses in Vietnam through the following forms: investing in housing construction projects; buying, leasing, receiving as gifts, or inheriting commercial housing, including apartments and detached houses in housing construction projects, except for areas ensuring national defense and security as regulated by the Government" (Clause 2, Article 159).

"The Government shall detail the papers proving the subjects and conditions that foreign organizations and individuals are eligible to own houses in Vietnam" (Clause 4, Article 160).

Nearly a month after the law was implemented, both sellers and buyers are still facing many confusions.

Regarding the confirmation of the Vietnamese origin of overseas Vietnamese.

According to current laws, the authorities responsible for confirming the Vietnamese origin of overseas Vietnamese are the provincial Department of Justice, Vietnamese representative agencies abroad, and the State Committee for Overseas Vietnamese (currently, Hanoi and Ho Chi Minh City have Committees for Overseas Vietnamese, but these agencies do not have the authority to confirm the Vietnamese origin of overseas Vietnamese).

The basis for confirming the Vietnamese origin of overseas Vietnamese primarily includes birth certificates, identity cards, family declaration forms, personal identification, and household registration. However, due to the country's historical circumstances, many overseas Vietnamese no longer have their household registration records, and many original household registration records are also no longer stored at authorized agencies in the country.

Therefore, appropriate solutions are needed to address these situations, creating conditions for overseas Vietnamese to have the opportunity to purchase and own houses in their homeland.

Before May 1975, in the southern region, the Civil Court could issue a "judgment in lieu of birth certificate" based on the statements of relevant persons, with two sworn witnesses who committed to take responsibility, to handle cases where there was no birth certificate or where it was impossible to retrieve the birth certificate from the original hometown.

In the recent session, the National Assembly discussed the draft amended Civil Code, which is expected to be further discussed and passed in the end-of-year session of 2015. The Ho Chi Minh City Real Estate Association proposed supplementing regulations granting the Civil Court the authority to issue "judgment in lieu of birth certificates" to legalize cases where there is no birth certificate or original household registration record. This aims to confirm the Vietnamese origin of overseas Vietnamese, thereby fulfilling the provisions of the 2014 Housing Law that allow overseas Vietnamese to purchase and own houses like domestic citizens.

The association also suggested that the Committees for Overseas Vietnamese in Hanoi and Ho Chi Minh City be given the authority to confirm the Vietnamese origin of overseas Vietnamese.

Regarding the regulation allowing foreign individuals to purchase and own houses in commercial housing projects (except for areas ensuring national defense and security as regulated by the Government) upon being allowed to enter Vietnam.

According to Clause 4.b, Article 7 of the draft decree guiding the Housing Law, "In case of selling or gifting houses to foreign organizations and individuals eligible to own houses in Vietnam, the buyer or recipient can only own the house for the remaining term...".

This draft regulation is not suitable and does not meet the needs and wishes of foreigners when purchasing and owning houses in Vietnam. The association proposed that foreign organizations and individuals eligible to own houses in Vietnam, when purchasing houses from other foreigners, should be entitled to a maximum ownership period of 50 years.

Similarly, for the regulation in Clause 4.a, Article 7 of the draft decree that allows domestic individuals and overseas Vietnamese to purchase houses from foreigners and own them for a long-term stable period, to ensure legal consistency.

Furthermore, Article 75 of the draft decree stipulates: "Areas where foreign organizations and individuals can own houses" should be amended so that the Government announces areas ensuring national defense and security where foreigners are not allowed to purchase and own houses; the Government can authorize the Ministry of Defense and the Ministry of Public Security to announce the list of these areas without adding procedures for these ministries to "notify the provincial People's Committee to direct the Department of Construction to specifically identify each commercial housing construction project in the area where foreign organizations and individuals are not allowed to own houses" as in the draft decree, to avoid unnecessary administrative procedures.

Regarding the regulation that foreign organizations and individuals, upon the expiration of the house ownership period, may be granted an extension as per the Government's regulations if there is a need (Clause 2.c, Article 161 of the Housing Law), the association proposed supplementing the draft decree stipulating that when the house ownership period is extended, foreign organizations and individuals should not incur any additional costs beyond administrative fees.

Regarding the transfer of house purchase money and credit loans for purchasing houses, the association proposed that the State Bank and the Ministry of Construction jointly guide foreign organizations and individuals on how to transfer house purchase money from foreign banks to Vietnam for purchasing houses; or the procedures for borrowing from credit institutions and foreign bank branches operating in Vietnam to buy houses.

Regarding the visa issuance period for foreign individuals owning houses in Vietnam. To facilitate foreign individuals owning houses in Vietnam, the Ministry of Public Security, Ministry of Foreign Affairs, and Ministry of Construction should jointly issue visas with a validity period of 1 to 3 years, allowing multiple entries and exits, in line with international practices.

These adjustments and supplements will help more effectively implement the 2014 Housing Law, creating favorable conditions for overseas Vietnamese and foreigners to purchase and own houses in Vietnam.