Vietnam Property Taxes: Foreign Buyer’s Guide

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No matter where you buy real estate, you need to have a good understanding of what property taxes to be paid when buying, holding, and selling. To many investors’ surprise, Vietnam has comparatively low real estate taxes, at least compared to many Western countries.

In this article, we review the taxes you have to pay when buying new properties on the primary market in Vietnam. Such properties are typically new condominium units bought directly from a developer, or with the help of an agent.

This is undoubtedly the most popular option among foreign buyers in Vietnam, due to existing foreign property ownership regulations.

What real estate taxes do I have to pay in Vietnam?

Below, you can find the taxes you have to pay when buying, holding, and selling property in Vietnam.

VAT (Value Added Tax)

If you buy a condominium unit on the primary market you have to pay a VAT of 10%. The VAT is multiplied by the purchase price and paid by both local and foreign buyers.

You pay the tax at the time of the purchase. Continue reading Vietnam Property Taxes: Foreign Buyer’s Guide

Regulations for Viet Kieu Buying Property in Vietnam

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Since Vietnam opened in 2015, increasingly more foreigners and Viet Kieu have invested or plan to invest in this rapidly growing economy. The country offers some of Asia’s highest rental yields at the same time as property prices have increased by double digits in places like Ho Chi Minh City.

At the same time, more and more overseas Vietnamese wonder how it works from a regulatory point of view when investing in Vietnam real estate. In this article, I explain what the definition of a Viet Kieu us, what ownership regulations that apply, what the benefits of buying property as a Viet Kieu are, and more.

What is the definition of a Viet Kieu?

Before we get started, we first need to understand the definition of a Viet Kieu. In short, Viet Kieu are overseas Vietnamese people who live outside of Vietnam in a diaspora. We can find the biggest community of Viet Kieu’s in the United States. Continue reading Regulations for Viet Kieu Buying Property in Vietnam

What is the pink book in Vietnam?

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Before you buy property in a foreign country, you should have a good understanding of the buying process and the documents involved. This is especially true for developing countries in Southeast Asia, like Vietnam.

Many readers have a little knowledge about the “pink book”, what it’s used for, and how important it is when buying a property in Vietnam.

In this article, we explain what the pink book is, which authority that issues the pink book, how much it costs, what documents you need to provide, and more. Let’s start and review what the pink book is.

What is the pink book used for?

The pink book is a legal document that you should secure as proof of ownership when buying real estate in Vietnam.

The document is legally called the “Certificate of Land Use Right and Ownership of House and Other Assets on the Land”, but most people just refer to the document as the “pink book”.

As you can hear by its name, this certificate of ownership allows homeowners to fully perform the rights from buying the property. For example, you have the right to lease your property or affirm information related to inheritance. Continue reading What is the pink book in Vietnam?

Vietnam Foreign Property Ownership Quota

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Vietnam opened to foreign property buyers in 2015 and foreign buyers have poured in. However, you can only buy property as long as you meet the foreign property ownership quotas stipulated by the government.

In this article, I explain what foreign ownership quotas are, why they are imposed in Vietnam, in which Asian countries you can find them, what disadvantages it brings when buying property, and more.

Let’s start and review what it means practically for overseas buyers who want to invest in Vietnam property and have to meet local ownership quotas.

What is a foreign ownership quota?

Foreign ownership quotas can typically be found in developing Asian countries to protect the social and economic development. While there are no foreign ownership quotas in East Asian countries, like South Korea and Japan, you can find the quotas in:

  • Vietnam
  • The Philippines
  • Thailand
  • Cambodia

Continue reading Vietnam Foreign Property Ownership Quota

Can Foreigners Buy Property in Vietnam?

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In 2015, the Vietnamese government made it remarkably easier for foreigners to invest in Vietnam property thanks to the issuance of the Vietnam’s New Law to Foreign Ownership of Property.

Since then, many early investors have managed to earn remarkable profits from the Vietnamese property market as prices have increased by double digits yearly in places like Ho Chi Minh.

Besides, not only did Vietnam loosen its restrictions to foreigners in the real estate market. At the end of 2015, the Ho Chi Minh Stock Exchange (HOSE) removed all restrictions on foreign ownership.

That said, Vietnamese ownership regulations are stricter compared to countries like Thailand, Malaysia, and Cambodia.

Requirements for foreigners to buy property in Vietnam

After July 1st, 2015, you can purchase property as long as you’re allowed to enter Vietnam. Before that, foreigners had to work in Vietnam for at least 1 year (the same as it goes in China) and meet certain criteria. In short, buying real estate here was a completely different story and off the map for many investors.

Now, there are no restrictions for foreigners to have Vietnam as their domicile (like in Indonesia) or to stay there for a specific amount of time each year. Besides, you won’t need to meet any minimum investment requirements, like in Malaysia. Continue reading Can Foreigners Buy Property in Vietnam?

7 Asian Countries Without Capital Gains Tax

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Investors often pay much attention to the taxes and fees they have to pay at the time of buying property.

Truth be told, stamp duties, VAT and real estate agent fees can become significant when added up.

But, to have a complete exit strategy, it’s equally important that you understand what taxes you need to pay when holding and selling property.

In most countries, sellers need to pay capital gains tax when selling property. The tax can be substantial, especially if the property has increased much in value.

In this article, I list Asian countries where you don’t have to pay capital gains tax.

First, let me explain what capital gains tax is and how it’s calculated.

What is Capital Gains Tax?

Capital gains tax, sometimes referred to as CGT, is collected by governments and charged to the profits made when selling assets. Might it be real estate, businesses or stocks.

In Asia, capital gains tax rates normally range between 0% to 20%, depending on where you buy. With rates that high, the tax can reduce your profits significantly.

Not to forget, you might even be subject to capital gains tax in countries where the tax is generally not charged.

Continue reading 7 Asian Countries Without Capital Gains Tax

4 Asian Countries with No Property Tax

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Property taxes can have a huge impact on overseas investors’ buying decisions. With the growing interest in Asian markets, and especially developing markets, we need to keep in mind that tax rates can change fast.

Not only do developing countries change property taxes to attract more foreign capital or boost their economies. We also see sudden changes and the introduction of new taxes in places like Hong Kong, Singapore, and Korea.

This is mainly to avoid speculation, cool down the markets, and protect local citizens.

Interestingly, there are some countries that don’t charge any annual property tax to locals, or to foreigners for that matter. In other countries, the property tax is almost negligible.

In this article, you’ll learn the following:

Continue reading 4 Asian Countries with No Property Tax

Why You Should Contact a Solicitor Before Buying Property in Asia

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You’ve signed the contract and transferred the down payment. Your agent insists that all is well, and you can move in next week.

Only to find out that foreigners are not even allowed to buy that type of property.

These things happen, and overseas property buyers find themselves in hot water all the time – often as a result of working with the wrong local partner.

In this article, you will learn why you should not go directly to a local real estate agent when buying property in Vietnam, Cambodia, the Philippines or other developing countries in Asia – but to a law firm that can navigate you through a risky and complex process. Continue reading Why You Should Contact a Solicitor Before Buying Property in Asia

Property Tax for Overseas Property: A Complete Guide

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Property tax is almost universal and one of the oldest forms of taxes. It’s imposed by almost all countries in the world, to persons who own property.

No matter where you’re buying a property, it’s often difficult to escape from property tax.

There are some exceptions, for example Qatar, Saudi Arabia, and a few other Middle Eastern countries.

In addition:

There’s a huge variation in the amount you have to pay in property tax, depending on where you live.

This article explains the details you need to know about property tax in different countries.

Continue reading Property Tax for Overseas Property: A Complete Guide

Withholding Tax for Overseas Property: A Complete Guide

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If you decide to buy a property overseas, it’s important that you’re aware of the different mandatory taxes.

Most governments from all around the world tax your income in different forms. One of these taxes imposed on your income is called withholding tax.

If you’re an investor who is interested in buying property in other countries to generate income through rent or by selling for a higher price, you may have to pay withholding tax on your rental income or capital gain.

In this article I explain all the essentials you need to know about Withholding tax.

What is Withholding tax?

Withholding tax, also known as retention tax, mostly applies to employment income for residents.

For non-residents, it applies to income generated through rent or the sale of the real estate.

Other income sources that are subject to withholding tax for non-resident foreigners are:

a. Dividends

b. Interest

c. Royalties

d. Service Fees

Purpose of Withholding Tax

Continue reading Withholding Tax for Overseas Property: A Complete Guide