Real Estate Transaction In Vietnam: List Of 27 Frequently Asked Questions And Answers.

 

1. What documents need to be prepared before transferring the residential houses or apartments (“Real Estate”)?
 

Among others, the seller and the buyer need to prepare the following main documents:
 

1. Seller:
    

   • Land use rights, house ownership, and assets attached to land Certificate (“LURC”).

   • Identity card or passport;

   • Household registration book;

   • Real Estate transfer agreement;

   • Marital status certificate (marriage registration/ single status certificate); and

   • Authorization agreement (if the seller authorizes the third party).
      

2. Buyer:
    

   • Identity card or passport;

   • Household registration book; and

   • Marital status certificate.
      

2. How to check the Real Estate’s status before making a transaction?
 

The following methods can be used to check the Real Estate’s legal status:
 

• Checking on the LURC: It is necessary to check the contents relating to the land area, land use purpose, term of using, land origin, etc.

• Checking on the notice, receipt of registration tax payment, drawing of the current house.

• Submitting a request form to the District-level Land Registration Office for land data to check whether the land is under planning, mortgage, dispute, or expropriation, etc.
   

3. What types of documents must be notarized when transferring the Real Estate?
 

It is necessary to notarize the Real Estate transfer agreement signed by the seller and the buyer when transferring Real Estate.
 

4. Is it necessary to carry out the procedures for changing the owner’s name on the LURC when transferring the Real Estate? What are the legal consequences of failing to carry out this procedure?
 

Yes, it is. The transferee must change the owner’s name on the LURC (Registration of land changes) within 30 days from the agreement’s effective date for the transfer of land use rights and ownership of houses on the land.
 

If failing to carry out the procedures for changing the owner’s name, the transferee will be fined ranging from VND1 million to VND10 million.
 

5. What is the procedure for transferring Real Estate? How long is the execution time?
 

The procedure for transferring Real Estate:
 

• Step 1: Preparing the required documents;

• Step 2: Notarizing the Real Estate transfer agreement;

• Step 3: Submitting the documents to the local Land Registration Office or the People’s Committee at commune-level where the land is located;

• Step 4: Paying personal income tax (“PIT”) and registration fee;

• Step 5: Obtaining the renewal LURC.
   

Estimate execution time: 10 -15 working days from the date when the authority received a valid dossier.
 

6. What are the required documents for changing the owner’s name on the LURC?
 

The required documents are as follow:
 

• Application for registration of land changes;

• Real Estate transfer agreement;

• LURC;

• PIT declaration;

• Documents for proving PIT exemption (if any);

• Registration fee declaration; and

• Documents for proving registration fee exemption (if any).
   

7. Can the notarized Real Estate transfer agreement be canceled? How to cancel it?
 

Yes, it can. The notarized Real Estate transfer agreement can be canceled if the parties have the written agreement/ commitment.
 

The cancellation of the notarized Real Estate transfer agreement shall be implemented by a notary at the Notary Office where the notarization was previously performed. The procedures for notarizing the cancellation of a notarized agreement are the same as the procedures for notarizing the agreement.
 

8. Who is responsible for changing the name on the LURC when transferring?
 

There is no requirement that the transferor or transferee carry out the procedure of changing the name on the LURC, so that two parties can make an agreement which party implements these procedures, but the transferee must pay the registration fee.
 

9. Is it possible to obtain the LURC when transferring the Real Estate on handwriting paper?
 

There are two cases of being issued the LURC when transferring the Real Estate on handwriting paper, including:
 

• Using of land with the land use rights transferred or donated before 01 January 2008;

• Using of land with the land use rights transferred or donated between 01 January 2008 to and 01 July 2014 and the documents on land use rights required by law are available;
   

Thus, these two cases only apply when the transfer agreement takes effect before 01 July 2014. From 01 July 2014 to the present, it is not allowed to transfer the Real Estate by handwriting paper, the notarized agreement is required, otherwise, the transaction will be invalid.
 

10. Which tax obligations shall be fulfilled when carrying out the transfer of the Real Estate? Who is responsible for paying those taxes?

 

The parties are responsible for the following taxes when transferring Real Estate:
 

• The transferor must pay a PIT;

• The transferee must pay a registration fee to carry out the change registration.
   

11. What documents must be prepared when declaring PIT?
 

The following main documents are required when declaring PIT:
 

• PIT declaration form;

• Real Estate transfer agreement;

• Identity card or passport;

• LURC; and

• Documents for proving PIT exemption (if any).
   

12. What documents must be prepared when declaring registration fees?
 

Required documents when declaring registration fee include:
 

• Registration fee declaration form;

• Documents for proving registration fee exemption (if any); and

• Real Estate transfer agreement.
   

13. Is it possible to transfer bank-mortgaged Real Estate?
 

The answer is yes. The bank-mortgaged Real Estate at the bank can be transferred to others, however, the transferor must obtain the consent of the mortgage bank before transferring.
 

14. What are the risks of transferring mortgaged Real Estate?
 

Transferring mortgaged Real Estate will have the following risks:
 

• If the transfer is made without the bank’s consent or the debt has not been fully paid to the bank, this agreement is deemed null and void for being contrary to the provisions of law and affecting the interests of the third party’s obligation – the bank.

• The seller conspires with the bank’s employees to deceive the buyer and appropriate the deposited amount.
   

15. Is it possible to lease the off-plan Real Estate?
 

Yes, it is. Individuals or legal entities can lease the off-plan Real Estate if all of the conditions for putting the off-plan Real Estate into business are met.
 

16. Is the rental agreement required to be notarized?
 

No, it is not. The rental agreement is not required to be notarized unless the parties request it.
 

17. Can the foreigners own permanent residential Real Estate in Vietnam?
 

The foreigners can own houses including apartments, commercial houses, and separate houses in Vietnam according to the housing transaction agreement, but they cannot own them for more than 50 years from the day they are granted the LURC, and they may be also granted an extension.
 

If a foreigner marries a Vietnamese citizen or an overseas Vietnamese, they are eligible for stable and long-term homeownership and have the same rights as Vietnamese citizens.
 

18. Who is responsible for the registration procedures for the LURC when buying an apartment/ land in the project?
 

When a customer buys an apartment/ land in the project, the housing project investor shall either implement the procedure for granting the LURC on behalf of the customer or provide the necessary documentation for customers so that they can register on their own.
 

19. Can overseas-Vietnamese (Viet Kieu) own land in Vietnam?
 

Overseas Vietnamese who are eligible to own houses in Vietnam under the housing laws may acquire land use rights through purchase, lease-purchase, inheritance, or donation of houses associated with land use rights.
 

20. Do all cases of the land use rights inheritance result in a change in the land user?
 

No, they do not. It is not deemed that all cases of the land use rights inheritance result in a change in the land user. If the land users die without their heir (there is no land user), the land will be recovered by the State.
 

21. What is the basis for the calculation of land use levies or land lease fees?
 

a) Bases for calculation of land use levies include:
 

• The land area which is allocated, permitted for change of land use purpose, or of which land use rights are recognized;

• The land use purpose; and

• The land price or the winning price.
   

b) Bases for calculation of land lease fee include:
 

• The area of leased land;

• The land lease term;

• The unit price for land lease; in case of auction of land lease rights, the land rental is the winning unit price; and

• Types of land lease, including annual rental payment or full one-off rental payment for the entire lease period.
   

22. Who is exempt from paying PIT when transferring the Real Estate?
 

There are 02 cases of PIT exemption when transferring Real Estate:
 

• Buying and selling between people who are married or foster relationships; and

• The transferor owns only one house in a land plot and has the right to own the house and use the residential land for at least 6 months.
   

23. Is it possible to build a house on agricultural land?
 

No, it is not. The land user cannot build a house on agricultural land. To build a house, the land user must convert agricultural land to residential land according to the local land-use plan.
 

24. Is it possible to buy, sell or transfer social housing?
 

Yes, it is. Social housing is sold under the provisions of law. However, the lessee or the purchaser of social housing may not resell the social housing for at least 5 years after full payment of the rent and purchase price of the house.
 

Within less than 5 years of paying off the purchase, lease-purchase of social housing, if the purchasers or hire-purchasers wish to resell the social housing, they may only resell it to the State or investors or resell to subjects entitled to buy, rent-purchase social houses as prescribed in the law, with the maximum selling price equal to the selling price of social houses of the same type at the same place and time of sale and do not have to pay PIT.
 

25. What are the requirements for buying, selling, and transferring house serving relocation?
 

The house serving relocation can be transferred if it meets the conditions for the transaction as follows:
 

• Having a LURC;

• Not subject to disputes, complaints about the ownership;

• Not subject to distraint for judgment enforcement;

• Having no decision on land recovery, a notice of house clearance, or demolition.
   

26. How is the land price table published by the Provincial-level People’s Committee used?
 

The land price list is used as a basis in the following cases:
 

• Calculating land use fees in some cases;

• Calculating land use tax;

• Calculation of fees in land management and use;

• Calculating of fines for administrative violations in the field of land;

• Calculating indemnification paid to the State for damage caused in land management and use;

• Calculating the value of land use rights to pay to those who voluntarily return the land to the State.
   

27. What are the legal consequences of setting the transfer agreement’s price lower than the actual transfer price of the Real Estate?
 

It is illegal to set a price in the transfer agreement lower than the actual transfer price of the Real Estate.
 

In case of being detected, the transferor may be administratively sanctioned in the tax field. Worse, that party can be criminally prosecuted for tax evasion. Besides, the dishonest declaration of the transfer price will easily result in a dispute between the parties.