How to Buy Property in Nha Trang: Legal Norms and Practical Advice
Since 2015, the conditions for the acquisition of real estate for foreigners have softened considerably. Vietnam has become more open and welcomes everyone: from tourists and immigrants to hungry investors.
Nha Trang is the fourth largest city in Vietnam. It is located between Saigon and Da Nang. Its convenient location makes it easy to get to other popular vacation spots. Nha Trang is famous for one of the most beautiful bays in the world and has a six-kilometer coastline. Many foreigners (Americans, Australians, Europeans) decide to acquire their own real estate here to enjoy local seafood, basking in the sun.
During the day you can go scuba diving, and at night go to the city center to skip a couple of glasses of beer. Every year a huge number of tourists come to Nha Trang. Due to the excellent location, excellent beaches and relatively low prices, many decide to stay and buy property. You can see here both super-luxury villas and more affordable houses. In this article we will explain the main points that you need to know if you want to buy property in Nha Trang.
Demographics of Nha Trang
In Nha Trang you will meet many Russians and immigrants from China. Having discovered the signs of restaurants and menus in Russian or Chinese, you will be surprised how the locals have adapted to new tourists and migrants. It is highly likely that you will meet Russian-speaking street vendors and hotel staff. When compared to Thailand, Nha Trang resembles Pattaya. Danang is more like Phuket, and Saigon is comparable to Bangkok. If you ever go to Pattaya, you will see the same situation with the Russians and the Chinese.
Buying a Villa in the North of Nha Trang
If you want privacy, then the best choice for you will be a house within walking distance of the beach. The price depends largely on proximity to local attractions and the coastline. In the northern part of Nha Trang mainly inhabited by local residents. There are not many tourist attractions in this area. Here you can find excellent two-three bedroom villas worth about 100 000-200 000 US dollars, even if you have the opportunity to buy a house in the amount of 500 000 US dollars.
Buying a Villa in the South of Nha Trang
Compared with the north side, the south part is more noisy. There are more tourist attractions and, accordingly, more foreigners. Prices are also slightly different: 2-3 bedroom villas will cost from 100,000 to 300,000 dollars.
Buying an Apartment in Nha Trang
Just like in other countries and cities, the rule here is: you can save a decent amount of money by buying an apartment instead of a house. The price of new, well-maintained 2-bedroom apartments is about 70,000 US dollars. The more north you move, the stronger the prices will fall: about 50,000-60,000 US dollars. For a 3-bedroom apartment with 2 bathrooms, the price will increase slightly – about $ 100,000. In any case, it is quite profitable compared to buying an apartment in the central areas of Saigon or Da Nang.
Realtors in Nha Trang
We strongly recommend that you find a realtor. It is very important that you communicate in the same language. A realtor will select an apartment that meets your needs and is in a good location. It is important that you be aware of local property prices. Here is a list of some of the largest realtors of Nha Trang:
- Nha Trang Consultation
Basic rules for foreigners investing in real estate in Vietnam:
- For foreigners buying a home, all you need is a tourist visa.
- Removed restrictions on the number of purchased property
- Foreigners are limited to buying no more than 30% of units in condominiums and cannot own more than 10% of land project objects.
- By marrying a Vietnamese citizen, you will not be subject to restrictions on land ownership.
- Foreigners cannot own land, as in many other Southeast Asian countries, such as Cambodia and Thailand. Instead, the land collectively belongs to the Vietnamese people, but is ruled by the state.
- Due to restrictions on foreign ownership of land, you need to establish a lease agreement.
Freehold and Lease of Land for Foreigners in Vietnam
Since foreigners cannot own land in Vietnam, you need to rent land with a lease term of up to 50 years, in some cases up to 70 years. Now the Vietnamese government is considering extending the lease term from 50 to 99 years, and it is possible that changes will take place soon. Even if the rules become even less stringent, you need to be careful. There is no guarantee that you can extend the rental period.
Land Use Rights
Fortunately, Vietnam has a land law called “Land Use Rights”. It reduces the risks for foreigners to invest in Vietnam. This law says that even if you are not allowed to own land, you have the right to use it. Foreigners get the right to control the land, which is ruled by the state and belongs to the Vietnamese people. To do this, you will need to submit to the Vietnamese government the so-called certificate of land use rights.
Buying a Property
When you buy a property, it is important to get a certificate of ownership. In 2017, some foreigners had problems obtaining property certificates, which caused some frustration among investors. The problem is that, according to the law, foreigners cannot own real estate in areas important to national defense and security.
It is extremely important to make sure before making a cash transaction:
- that your potential property may belong to you as a foreigner
- that you can get a certificate of ownership.
Pink and Red Books
Title deeds are often referred to as the pink book. The name comes from the fact that it is really pink.
You should get a pink book after you acquire the property. The book reveals your property and gives you various rights. For example, declare information about inheritance. In short, the pink book is used for real estate ownership.
The pink book is more common among foreigners who usually invest in apartments. The pink book is the strongest proof of ownership. Keep in mind that without it you will be difficult to sell your property.
The pink book suggests that you can:
- Use your home for housing and other purposes.
- Destroy, maintain, upgrade and rebuild your house, observing the conditions and procedures of the Construction Law
- Make transactions in the sale, pledge or lease of property
Hire a Lawyer
We highly recommend you hire a lawyer. The Vietnamese market has opened up to the outside world quite recently, so during the purchase process, obstacles and pitfalls can appear The lawyer will find out if you can get a certificate of ownership, as well as help you with translation and documentation. Search the Internet for good law firms and email them to find out what they can offer you.
What Questions Should I Ask a Lawyer?
- Do you have any feedback and examples of cooperation with foreign investors?
- Can you help confirm the receipt of a certificate of ownership (pink book)?
- How much are your services?
- Are there any other fees I should know about?
- How much time do you do business?
- Do you have a license?
- Will you accompany my communication with the authorities and sellers?
You have three options for making payments:
- Open a local bank account, for example, in Vietcombank and Vietinbank
- Transfer money from your home country directly to a bank branch in Vietnam. Vietnam has international banks such as HSBC that can help
- Transfer money directly to seller
Check all documents
Review the title and all other documents with your lawyer. Make sure the seller owns the property and that after the completion of the transaction you will receive a certificate of ownership.
Sign the Contract and Complete the Purchase
Please note that contracts must be written in both Vietnamese and Russian. Keep in mind that in case of further litigation, the Vietnamese version will be considered valid, so make sure that the lawyer has checked the Vietnamese version for errors, hidden points and pitfalls.
What Taxes Do Foreigners Need to Pay When Buying Property?
When buying a property you will need to pay the following taxes:
- Stamp duty for foreigners in Vietnam, which is 0.5%
- Capital Gains Tax for Foreigners in Vietnam – 0.15%
- Tax on rent for foreigners in Vietnam – 20%
- Land tax for foreigners in Vietnam, which is 0.03-0.15%
- Transfer tax (VAT) for foreigners in Vietnam – 5%
- Registration fee for foreigners in Vietnam – 0.05%
Do I Have to Live in Vietnam if I Buy Real Estate?
In accordance with the new rules, you do not need to reside or remain in Vietnam for a long period of time. In other countries, such as Australia, for example, you sometimes need to actively use your property to save it.
Can Foreigners Rent Their Property in Vietnam?
The recent changes in the Vietnam Residential Law provide more privileges to foreigners who want to own residential real estate. According to the new rules of ownership, there are no special restrictions for foreigners who would lease their facilities in Vietnam. But, if you decide to do this, report first to the housing authority in your area. Also keep in mind that you will need to pay personal income tax (PIT) and value added tax (VAT) in the amount of 10% of the total annual rental income.
Life in Nha Trang
Nha Trang is quite a small city. Having lived here for some time, you will meet familiar faces on the streets every day. In Nha Trang, you will get the opportunity to plunge into another culture. Here you will not see street cleaning machines. People with brooms clean the streets three times a day. The fields are handled by hands and hoes, the roads are built with the help of buckets and rakes. The minimum wage in Vietnam is about $ 100 per month. Workers are not replaced by modern equipment.
Monthly, on the night of the new moon, beautifully decorated tables with offerings in the form of rice, fruit, wine, cakes, sweets and incense are put on the sidewalks at home and in shops. Vietnamese believe their ghost ancestors choose the night of the new moon or full moon to visit their families. Day by day there is perfect weather in Nha Trang, and you yourself do not notice how you relax more and more.