Vietnam: a draft law would limit foreign ownership to apartments

Vietnam is studying a revision of the Housing Law that would remove the possibility for foreign organizations and individuals to own houses with land in real estate projects. Under the version of the draft published on 13 September, they could buy or acquire under a lease-purchase arrangement commercial apartments from developers, receive them as a gift or inherit them.

The Ministry of Construction justifies this change by the need for consistency with Resolution 21-NQ/TW, adopted on 28 July by the Central Committee of the Communist Party. That text prohibits the privatization of land and the transfer of land-use rights to foreigners, except for overseas Vietnamese. Foreign ownership would therefore not disappear: only the type of property available would be narrowed.

Foreigners could not hold more than 30 % of the apartments in a condominium building. For a project with several buildings, this 30 % cap would apply to each building. Purchases would be excluded in areas where national defense and security must be protected: the government would define them, and local authorities would publish the list of projects open to foreigners.

The holding period would be capped at 50 ans from the issuance of the ownership certificate, with a single possible extension of up to 50 ans, depending on the remaining lifespan of the building. Foreigners married to a Vietnamese citizen living in Vietnam would retain rights equivalent to those of Vietnamese citizens, and those married to an overseas Vietnamese allowed to enter the country would have corresponding rights.

Since the 2023 law came into force, foreign organizations and individuals have acquired 1,519 homes in the country, according to the ministry's statistics. Including earlier acquisitions, the total is estimated at more than 6,000 homes. An official of a building management association considers the effect on liquidity and prices to be limited, as there are few houses owned by foreigners.

A lawyer proposes recognizing ownership of the house separately from the rights over the land, which would comply with the resolution while attracting foreign workers and entrepreneurs. Another speaker asks that holders of valid certificates fully retain their rights to transfer, gift, mortgage and bequeath, and suggests long-term leases for certain profiles.

This is a draft: the source gives neither a timetable for review or adoption nor an entry-into-force date. Nor does it say what exactly would happen to houses already owned by foreigners, the protection of their rights being mentioned only as a request from one speaker. The experts' proposals do not appear in the text of the draft.