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Being the largest city and financial and economic center in Vietnam, Ho Chi Minh has attracted a large number of expats and locals to come live in this city. The rapid growth of the population in the city has resulted in high demand for housing. This fact alone attracts foreign investors from all around the world to invest in the city’s property sector.

In addition, Vietnam’s gross domestic product (GDP) exceeds 7% annually, which has made the country even more attractive to international investors. Vietnam opened its doors to foreign investors 5 years ago and as a result, you will first need to understand how the property market works in this country before you invest in Ho Chi Minh City?

Before you invest in Ho Chi Minh’s property sector, you need to learn about ownership regulations. You also need to learn about the real estate foreign ownership certificates, understand the buying process, and the process of transferring money. The last thing you need to understand is financing your property as well as the taxes you will need to pay.

Keep reading for our foreigner’s guide to buying a property in Ho Chi Minh.


What can foreigners buy in Ho Chi Minh?

Up until five years ago, Vietnam had strict foreign ownership regulations that make it very hard for foreigners to invest in real estate. However, the Vietnamese Government introduced the Vietnamese Law on Residential Housing (LRH) in July 2015.

This law makes it a lot easier for foreigners to buy property in the country. As long as you have enough money, you can buy as many units as you wish since there are currently no restrictions on the number of properties foreigners can buy. The most important points of the new foreign ownership law are:

  • Foreigners are allowed to buy a property simply by having a tourist visa.
  • Foreigners are allowed to buy an unlimited number of real estate units in the country. However, foreigners cannot buy more than 250 houses in one ward.
  • Foreigners can buy up to 30% of the units in the condominium blocks and cannot own more than 10% of the properties in a landed project.
  • The leasehold period is 50 years, but it can now be renewed.
  • Foreigners who marry a Vietnamese can get freehold ownership.

From this foreign ownership law, we can understand that foreigners can buy property, but does this include land? Like many other cities in Southeast Asia, foreigners cannot buy and own land in Ho Chi Minh. As regulated in the constitution, the land is jointly owned by all Vietnamese people, but the state manages it.

However, foreign organizations, as well as foreign individuals, can lease land. The leasehold is up to 50 years, but in some cases, it can be up to 70 years and can even be increased to 99 years at a later date.

Even though the regulations have relaxed over the years, you still need to be cautious. There is no guarantee that you can always renew your leasehold period. Fortunately, Vietnam currently has a law on land.

Commonly referred to as Land Use Rights (LUR), this law significantly decreases the risks for foreigners to buy property in Ho Chi Minh. The Land Use Rights stipulated that although you cannot own land, you have the right to use land. It also allows you to control the land allocated or leased by the Vietnamese state.


Real estate foreign ownership certificates in Ho Chi Minh

It is very important that you receive an ownership certificate when you buy a property from a developer. Back in 2017, foreigners had issues getting their property ownership certificates due to the protection of national defense and security. According to law, foreigners are not allowed to own properties in areas that are reserved to protect the national defense and security.

The areas are decided by the Ministry of National Defence as well as the Ministry of Public Security. Therefore, before purchasing a prospective property, make sure that it can be owned by you as a foreigner and confirm that you will receive the ownership certificate. There are two ownership certificates:

  • The pink book.  After you purchased a property, you will receive a small pink book – hence the name of the book. This book proves your ownership as well as your rights to the property. It gives you the right to lease your property and declare information regarding inheritance. In simple words. The pink book is used for the title to verify the ownership of a property. It includes your right to use your property for residential or other purposes, maintain, demolish, renovate, or rebuild your property, and to carry out transactions when mortgaging, leasing, or selling the property. The book also declares your right to give the property to an heir.
  • The red book. Instead of physical structures (such as condos and houses), the red book is used for the title to ownership of land. Since foreigners cannot own land, the red book is uncommon for foreigners.

Because the pink book is used for the title for ownership of property, it is very vital that you receive it. Even though you can use a Sales and Purchase Agreement (SPA) to prove that you bought a property, the strongest proof is to have both.

Keep in mind that although it’s not a legal requirement to have the pink book, it is considered as the strongest evidence of ownership. The SPA is equally important, but it can be harder for you to sell your property if you do not have a pink book.


The process of buying a property in Ho Chi Minh

Before you actually invest in Ho Chi Minh, it is important that you understand the buying process thoroughly.

1. How to pay for the property

You can pay for the property using a mortgage, cash assets, or both. Some sellers also allow installments with different interest rates. You need to make the transaction in Vietnamese Dong since US Dollar cannot be used to buy property in Vietnam.

2. Ask yourself why you want to buy property in Ho Chi Minh.

For example, if you are looking for high appreciation in value, your best choice is the developing areas of the city as it is attracting a lot of expats, foreign companies, as well as wealthy locals. If you are looking for high rental yields, it might be better to buy multiple numbers of units in the city.

3. Hire a property lawyer

This one is optional, but it is highly recommended to hire a lawyer for larger transactions since you may be faced with some obstacles. Most foreigners do not need a lawyer when buying properties on the primary market in Ho Chi Minh, but if you feel like you need one to guide you through the legal process, then make sure you hire a reputable and trustworthy lawyer.

4. Reserve the property

Once you have found a property that you like, it is time to reserve the property. Normally, you will need to pay a fee of between VND 50 million and VND 100 million and may or may not be refundable.

5. Pay the first installment

14 days after you paid the first deposit, you will need to pay the first installment.

6. Pay the installments according to the schedule

Make sure that you and the seller agree on all points in the contract before you sign it. Then, you will need to pay the installments as stated in the contract.

7. Sales and Purchase Agreement (SPA)

If your eligibility for foreign ownership is confirmed, you need to draft and execute your SPA. The SPA shall be transferable later.

8. Handover of the property

Before you can acquire the unit, you should pay the maintenance fee, which is 2% of the purchase value. In addition, you need to pay 1 year of management and operation charges, registration fees, and an additional installment.

9. Preparation for granting the ownership certificate (pink book)

After you signed the SPA and managed your financial duties, submit your documents together with the application in order to receive the pink book.

10. Final payment

Make your final payment within 14 days after you receive the notification of receiving the pink book.


About the Author: Amy Lee is a writer, blogger, and digital marketing hybrid. She also contributes in GlobalPropertyGuide, RealtyTimes, MagneticStrategy.