Law revisions necessary to clarify foreign property rights

Draft amended laws on land, housing, and real estate business are being further studied and discussed at the fourth session of the 15th National Assembly. However, the current laws include conflicts over the land use rights and ownership of property when it comes to foreign individuals.

Nguyen Van Dinh, an expert in land law, said that the three pieces of legislation are incompatible in terms of non-nationals wanting to own land or property in this country.

“The Law on Housing recognises foreigners as having the right to own houses, but the Law on Land does not recognise that their rights in terms of actually using the land,” Dinh said.

In the proposal to develop an amended Law on Housing, which is expected to be passed at the same time as the revised Law on Land, the Ministry of Construction is hoping to solve several major groups of policies, Dinh said. Regarding the policy on house ownership, the proposal is to continue the policy of encouraging and creating favourable conditions for foreign individuals and organisations to buy and own houses in Vietnam in accordance with international practices.

However, Dinh said that this policy of encouraging foreign individuals to buy houses cannot be fully implemented without solving the issue of giving land ownership certificates to those people. “In order to solve this, the revised Law on Land needs to recognise the land use rights of foreign individuals,” he suggested.

Apartment projects with ideal locations are reportedly reaching the maximum of the allowed percentage of 30 per cent sold to foreigners. photo Le Toan

According to a recommendation reported by the Vietnam Chamber of Commerce and Industry (VCCI) in September, Article 6 of the draft amended Law on Land only lists “foreign-invested economic organisations” and “foreign organisations with diplomatic functions” as land users – excluding foreign individuals.

“This regulation needs to be reconsidered to ensure consistency with the provisions of the Law on Real Estate Business and the current Law on Housing,” the report claimed.

Conversely, the draft Law on Land also does not refer to the rights of Vietnamese individuals if they buy a house from a non-national, and the rights of Vietnamese buyers will not be guaranteed, emphasised the VCCI. Therefore, it proposes a review on the regulations of land use for foreigners to ensure uniformity in the legal system.

According to Nguyen Duc Tinh, managing partner at law firm TTP Bengoshi, the current Law on Housing even has incompatibilities with its own guidelines decree.

According to the provisions in Article 159 of the Law on Housing 2014, foreign individuals are allowed to own homes in Vietnam.

Article 160 of the same law stipulates that individuals who invest in building houses in Vietnam must have an investment certificate and a house built on the project area to be able to own a house in Vietnam, regardless of issues surrounding passports and related entry requirements.

However, in Decree No.99/2015/ND-CP to instruct implementation of that law, these individuals must have a valid passport with entry verification stamps from the immigration authority of Vietnam, and must not be subject to diplomatic privileges or immunities.

“This inconsistency between the Law on Housing and Decree 99 means that any foreigner who wants to own a house in Vietnam cannot figure out if they need a valid passport with an entry stamp or not. This will only lead to difficulties in the process,” Tinh said.

As noted by market research consultants, the demand for investment in housing projects in Vietnam by foreigners is considerable, especially from key foreign direct investment countries such as South Korea, Japan, China, and Singapore.

Apartment projects from well-known investors with ideal locations are reportedly reaching the maximum of the allowed percentage of 30 per cent sold to foreigners.

Eight more housing projects in Hanoi can be owned by foreigners Hanoi’s Department of Construction recently announced foreign organisations and individuals can now own eight more housing projects.