The latest draft amendment to the Housing Law has drawn flak for perpetuating strict requirements on foreign home ownership in Vietnam.
The latest version of the bill, looks to restrict home ownership to foreigners who are “studying, working and living” in Vietnam.
This requirement was proposed after drafters removed other binding proposals that required foreigners to migrate to Vietnam and limit foreigners from owning more than 250 houses in a given ward or 40 percent of a single apartment building.
Le Hoang Chau, chairman of Ho Chi Minh City Real Estate Association, said that in reality, many foreign entrepreneurs have businesses in many countries and visit each for a few days or weeks.
“Many of them travel a lot but they want to own a house in Vietnam,” he said.
Alan Phan, a Vietnamese American who works in Vietnam, said that foreigners can buy as many houses as they like in other countries like Singapore, Thailand, the US and Australia.
“They can even borrow low-interest loans and only pay tax when they profit on the sale of the home,” he said.
“Meanwhile, complicated procedures and strict requirement in Vietnam will make it difficult to attract investment from foreigners who want to buy houses either to reside in or to flip,” he said.
A Vietnamese entrepreneur in HCMC, who asked to remain anonymous, said he bought a house in Singapore--a small country with limited housing resources that places no restrictions on foreign home ownership.
“It is good when they [foreigners] bring in their money to buy house in Vietnam. Why do we cause difficulties for them when we have an abundance of unsold apartments?”
“If we are too strict, they'll invest in neighboring countries instead. Then, we lose this source of foreign investment,” he said.
Pham Si Liem, former deputy construction minister, said stringent regulations and proposals should be removed because they hinder the country’s development.
“Slackening requirements for foreign home ownership in Vietnam also conveys the message that the country is committed to attracting foreign investment,” he said.
“There should only be regulations that ban foreigners from buying houses in sensitive areas like near the border or other strategic places.”
In yet another bid to resuscitate the struggling property market and resolve bad debts, Prime Minister Nguyen Tan Dung last December instructed concerned agencies to continue amending laws to create an environment most conducive to would-be foreign home buyers here in Vietnam.
Since August 2013, Vietnamese lawmakers have been debating draft laws that would allow foreigners to buy more than one apartment unit, secure apartment leasehold rights for longer than the current limit of 50 years and buy land.
In a report sent to PM by the Ministry of Construction last July, the ministry proposed new regulations that would allow organizations like foreign investment funds, banks, Vietnamese branches and representative offices of overseas companies, as well as all foreigners who have a visa to the country that is valid for at least three months, to buy both apartments and independent houses in Vietnam.
But diplomatic institutions, NGOs, and their employees would not be allowed to purchase homes in the country, according to the proposed regulations.
The ministry also proposed that foreign organizations and individuals eligible for home purchase in Vietnam be allowed to buy different types of properties, including townhouses and villas with less than 500 square meters of land and apartments.
These properties could be leased if their foreign owners are not living in them and the houses could only be sold or given as gifts 12 months after the ownership certification is granted, if the ministry's proposals become law.
"Given the difficulties in the property market over the past two years, the easing of foreign ownership laws would lure more potential foreign home buyers and help bring liquidity to the [property] market in 2014," Minister of Planning and Investment Bui Quang Vinh said last year.
Getting married to own apartment
According to government statistics, only 126 foreigners had bought apartment in Vietnam by 2013--four years after a resolution on the issue went into effect.
The government estimates that roughly 80,000 foreigners reside in Vietnam.
The 2009 resolution created five categories of foreign individuals and organizations eligible to buy apartments: individuals who invest directly in Vietnam or who are employed in management positions here; foreigners who receive certificates of merit or medals from the president or government for their contributions to the country; those who work in socioeconomic fields, hold at least a bachelor's degree or higher, and possess special knowledge and skills that Vietnam needs; foreigners who are married to Vietnamese nationals; and foreign-invested companies operating in Vietnam--except for those in the real estate industry--that need to buy homes for their employees.
Under the resolution, foreigners may buy apartments, but not houses, and each individual or organization can own one apartment that cannot be leased or used for any other purpose than residence.
But most foreigners in Vietnam do not belong to the five categories.
Of 126 foreigners who own apartments in Vietnam, 108 became eligible to do so after getting married to Vietnamese citizens.