Housing Law 2014 of Vietnam has created more favorable conditions for Korean to own houses in Vietnam. However, buying a residential house in Vietnam is not actually an easy matter to Korean given its legal complexity in real estate.  

Secondly, it is advisable that the buyer should keep a track record for the money he brings to Vietnam for buying the house.  This would be better for the buyer in remitting the money back after selling the house later on.  For this purpose, he should open an account at a bank in Vietnam to which the money will be transferred and from which the payments for the house should be made. In case the money is his salary or income earned from working or doing business in Vietnam, he should keep document supporting for the money.

Thirdly, the buyer should get to know which property projects that he or she is permitted or not permitted to buy in order to avoid future risks.  Please note that Korean buyers are only permitted to buy houses from new housing development projects, not in existing residential quarters. This job is not difficult to Korean buyers if he or she consults with a reputable property agent such as Savills or Collier.

Fourthly, on contracting with the property developers, the Korean buyers should make sure that the property developers are qualified for signing housing sale and purchase agreements with the buyers.  In principle, the property developers are allowed to enter into housing sale and purchase agreements once (i) the housing project is properly approved; (ii) the foundation work of the house is completed, and (iii) the terms and conditions of the agreement for selling  a condo have been registered at Vietnam Competition Authority (under the Ministry of Trade and Industry).  An agreement may be void if failing to meet one of these conditions, and thus, the interests of the buyer may not be properly protected.

Fifthly, it should be noted with the implementation of a housing sale agreement with housing development projects since this may be not similar to the transaction practice in the buyer’s country.  For example, in Vietnam the housing developers usually do not give notice to the buyer of making the payments under the contract. It is the obligation of the buyer to follow the payment schedule as contracted. This ambiguity may lead to late payments by the buyers which may result in late payment penalty and/or early termination of contract by the seller (housing developer).  The buyers may get advice from lawyers to avoid these risks.

Sixthly, according to the Housing Law, Korean housing owners have full rights as Vietnamese have over the house, such as the right to lease, donation or capital contribution, inheriting to others, etc. with their house. However, it should be noted that the Korean owner can exercise these rights only after he or she has obtained a “land use right certificate and/or property ownership” to the real estate. Therefore, in the respective contract, the obligation to apply for the certificate of ownership and/or the land use rights by the seller should be clearly stipulated. Also, when leasing the real estate, the Korean owners must register the lease agreements with the local government (district-level administration committees), and properly declare his income tax for the earned rents. By complying these requirements, the Korean buyers’ incomes will be treated as legitimate income which can be remitted abroad. In addition, when renting or a house, it is also required that the owners must register temporary residence of the tenants with the relevant local authorities. Currently, it is still not clear how Korean, as house-owners, carry out this registration procedure.  Korean is afraid that if they do not regularly live in Vietnam, how can this obligation be implemented? Actually, this difficult task may become easier if the Korean owners can engage a real estate management company to take care of these, and on behalf of the Korean owners, to perform the management and administrative procedures involved.

Seventhly, if the Korean owners no longer want to own the house, what can they do? Can they sell it to other Korean or Vietnamese? Yes, they can according to the Housing Law.  However, currently there is no clear guidance from the State Bank of Vietnam that how the Korean owners can remit abroad the sale proceeds from selling the house.  However, my opinion is that if they can prove the money that they used to buy the house is of legal sources and relevant taxes have been fully paid, he or she is surely permitted to transfer their gains abroad.  Again, this should be consulted with a lawyer in real estate for getting through the procedure.