VietNamNet Bridge - The HCM City Real Estate Association (HoREA) has sent a dispatch to central agencies, proposing to amend articles of the 2013 Land Law. It believes that foreigners buying houses in Vietnam need to be recognized as land users (for no more than 50 years). 

The association also says that foreigners should receive land use right certificates, called ‘red books’ by Vietnamese. 

Pham Sy Liem, deputy chair of the Vietnam Construction Federation, former Deputy Minister of Construction, said in the globalized economy, Vietnamese buy properties overseas and foreigners buy houses in Vietnam.

Liem said there was no need to worry if foreigners own properties in Vietnam. However, he warned that it is necessary to watch out for speculation. Foreigners with good financial capacity may collect properties for speculation, creating an artificial short supply to push the prices up. 

Liem suggested that it is necessary to set limits on foreigners’ house purchases to prevent speculation.

The HCM City Real Estate Association (HoREA) has sent a dispatch to central agencies, proposing to amend articles of the 2013 Land Law. It believes that foreigners buying houses in Vietnam need to be recognized as land users (for no more than 50 years).

Economist Dinh The Hien said the US encourages people from all over the world to buy houses in the country. However, house purchases in the US and in Vietnam are covered by different laws.

When people buy houses in the US, the local and central administrations can collect tax from the transactions and that money goes to the government budgets every year.

In Vietnam, the property tax is very low, which benefits house owners, but the central and local budgets have no revenue sources from real estate.

Therefore, according to Hien, if Vietnam copies the US policy on allowing foreigners to buy houses at their will and pleasure, this will do more harm than good. The policy would help make properties more valuable, but would not help the central and local budgets get more money from tax.

Hien also warned that houses would become impossible to buy for low income earners who cannot compete with foreigners in financial capability.

Hien said the extension of foreign ownership right is a reasonable policy because it is in line with international practice, but this must be implemented only if Vietnam has reasonable tax policies.

Many foreigners have bought houses in Vietnam since the government removed strict regulations on foreign ownership.  Though some problems still exist in the legal framework, more and more foreigners are registering to buy houses in Vietnam.

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