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Foreign ownership limits set for houses, apartments

Update: May, 10/2014 - 10:01

HA NOI  (VNS) — An amended Housing Law draft would restrict foreign ownership to no more than 30 per cent of apartments in a building, or 250 houses in a ward.

The change is proposed in a preparatory copy of the amendment for a National Assembly meeting on May 20. Foreigners, excluding diplomats, would be allowed to own houses and apartments once they get an immigration pass and a work permit in Viet Nam. The ownership would expire in 50 years.

This is seen as a step to open the market to foreigners, and likely to revive the dull property market scenario.

At present, a foreigner is only able to buy or own property when he/she has a Vietnamese spouse, or makes large investments.

According to the Ministry of Construction's report, most of the nearly 120 foreigners who own houses in Viet Nam are married to Vietnamese citizens.

About 130,000 Koreans live in Viet Nam, and they have to rent homes owned by Vietnamese landlords because foreigners are not permitted to purchase houses in the country.

However, most local landlords refrain from leasing homes to foreigners.

On the other hand, Viet Kieu (overseas Vietnamese) are allowed to buy or own property without quantity or property restrictions.

Overseas Vietnamese

The current law allows Viet Kieu to buy only one house or apartment in which to reside after they have remained in the country for at least six months.

The changes are likely to mobilise capital resources, technology and management expertise to help the development of the country and the real estate market.

In another attempt to boost the market where sales are slowing, the Ministry of Construction, the State Bank of Viet Nam and the Ministry of Justice will allow low income buyers to mortgage their new houses or apartments to access loans from the VND30 trillion (US$1.3 billion) housing stimulus package.

Previously, banks had asked home buyers to provide proof of income and to prove their ability to repay debts.

They were also asked to mortgage other assets to borrow money from the package.

Statistics from the ministry show that by February 17, the central bank had approved lending contracts to 17 realty companies to the tune of VND1.46 trillion ($69.5 million), of which, VND536 billion ($25.5 million) was disbursed to 11 enterprises.

More than 2,270 home buyers are scheduled to receive loans worth a total of VND821 billion ($39 million), of which, VND505 billion ($24 million) was disbursed to 2,261 people. — VNS

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