The route to real estate ownership remains a complex one in Vietnam: It could take up to 6 months before homeowners can move into their chosen property. Typically, prospective buyers will choose a move-in ready property from those listed for sales on the primary or secondary market. They can then apply for a mortgage or pay entirely in cash while proceeding with important documents.
Let’s have a look at secondary market property transactions in this article: What are the stages to owning a home in Vietnam, and how long does it take? By the end of this, hopefully you’re more confident when it comes to selecting the right property to invest or live in.
What is the secondary real estate market?
It’s helpful to set up the definitions for the primary and secondary market. The primary market consists of first-time exchanged property: Think under-construction housing projects. Meanwhile, the secondary market is made up of properties that are sold after the first sale. Townhouses, apartments, and even residential land are complete projects that fall under this category.
When you buy a house on the secondary market, the prior owner’s rights to own and use the property are directly transferred to you.
Below are the steps to ownership for property purchase on the secondary market. This applies to properties that have been issued with a pink book, the legal certificate of land ownership in Vietnam.
Make a payment
First, both the seller and buyer pre-agree on the property’s price, features, and included amenities. The buyer will then pay a deposit to secure this transaction. Typically, this is worth 10% to 15% of the property’s value.
The deposit payment can be done at a notary office.
Sign required documents
After the deposit is made, both parties must sign the SPA within 30 days from then on.
Note that a written and notarized SPA is required by Vietnamese law; you should not rely solely on verbal or oral agreements. Any types of title transferring contracts should be made in writing form.
Receive title transfer and pay taxes
Following the signing of the SPA, the buyer must submit the required papers to the Ministry of Natural Resources and Environment to transfer the property’s title and pink book to the new owner.
Both the buyer and the seller must pay taxes when transferring real estate. The buyer pays a registration tax that’s worth 0.5% of the property’s value, whereas the seller pays a personal income tax at 2% of the same property.
With all of the legal steps involved, purchasing a property on the secondary market remains a rigorous task. Fortunately, there are ways to become a foreign homeowner without having to go through all of this by yourself.
Homebase offers foreigners and Vietnamese nationals a more flexible alternative to traditional bank loans. Backed by prestigious multi-billion-dollar funds from across the world, they will help you with every step of the homebuying process and navigate in a complex market as Vietnam.
To learn more about Homebase, contact their experienced team at +84 94 823 00 33 or go to http://homebase.com.vn/.
This article is part of Homebase’ Real Estate 101 series and was co-created with their team. Homebase is a well-known proptech company in Vietnam that provides foreigners with a more flexible alternative to homeownership. For more information, please visit http://homebase.com.vn/.