The Vietnamese real estate market is becoming more attractive than ever, driven by the increased transparency of the new legal framework. However, the fundamental distinction between housing ownership and land use rights remains a substantial barrier if foreign investors do not thoroughly understand the compliance roadmap.
Under the provisions of the Land Law 2024, foreigners still do not fall under the category of entities eligible for direct land allocation or land lease. Nevertheless, opportunities for housing ownership have expanded significantly through commercial housing development projects. From establishing ownership rights to fulfilling the 2% transfer tax obligation—which shall remain in effect under the Law on Personal Income Tax 2025, coming into force on July 1, 2026 – each step necessitates rigorous documentation preparation and a sound understanding of legal practices. The following article by CDLAF will elaborate on the rights of foreigners regarding land use rights and housing ownership in Vietnam.
1. Foreign individuals and land use rights
Pursuant to Article 44 of the Land Law 2024, foreign individuals do not fall within the category of subjects eligible for land allocation, land lease, or recognition of land use rights by the State. Consequently, foreign individuals cannot hold title to purchase land (receive the transfer of land use rights).
The statutory provision rendering foreign individuals ineligible for land allocation, land lease, or recognition of land use rights by the State effectively creates an absolute “legal barrier”: Foreigners have no right to receive the transfer of land use rights (purchase of land plots) in Vietnam. This reflects the cautious legislative approach adopted by lawmakers aimed at ensuring national defense and security, as well as stabilizing the domestic real estate market. However, investors should note that this restriction applies exclusively to individuals. For investment activities conducted through a legal entity, depending on the specific investment objectives and local planning, investors may obtain land use rights via State land allocation or land lease, corresponding to the specific types of land applicable to foreign-invested enterprises.
2. Under what forms can foreign individuals own housing?
While access to land plots remains restricted, Housing Law 2023 has established a clearer legal framework, establishing property ownership rights for foreign individuals in a more transparent and direct manner. This is not merely about owning a place of residence but rather establishing a lawful asset portfolio in the Vietnamese market.
Pursuant to Article 17 of the Housing Law 2023, simply by holding a valid entry visa, a foreign individual may legally participate in the Vietnamese real estate market as a lawful owner of an apartment or individual house.
Accordingly, foreign individuals are entitled to purchase or lease-purchase directly from the developers of commercial housing projects. This is the safest segment, where projects have been strictly appraised for national defense and security conditions in accordance with Article 16 of this Law. Furthermore, a significant step forward is allowing foreign individuals to receive the transfer of housing from other foreign organizations and individuals who previously owned it. This creates a more flexible transaction framework within the foreign community, enhancing asset liquidity and creating more flexible exit opportunities for international investors.
Although the forms of ownership (purchase, gift, inheritance) have been expanded, the key limitation still lies in the list of approved projects. Foreign investors must pay special attention: Ownership rights can only be established in commercial housing projects that are not located in areas restricted for national defense and security. Therefore, verifying the list of projects eligible for foreign ownership and adhering strictly to the transaction execution process are mandatory steps to ensure the enforceability of ownership rights and the ability to register property changes in the future.
3. Real Estate Transfer Tax Obligations
Pursuant to clauses 1 and 2, Article 14 of the Law on Personal Income Tax 2007, as amended and supplemented by clause 1, Article 257 of the Land Law 2024, the personal income tax arising from real estate transfer activities is determined according to the following formula:
Personal income tax = Transfer price X 2%
Accordingly, individuals transferring real estate are subject to personal income tax at a rate of 2% on the transfer price.
Notably, effective from July 1, 2026, the Law on Personal Income Tax 2025 will officially come into force. Pursuant to clause 1, Article 14 and clause 1, Article 24 of this Law, the method for calculating personal income tax on real estate transfer activities shall remain unchanged. Accordingly, the payable tax amount continues to be determined at 2% of the real estate transfer price, applicable to both residents and non-residents.
Thus, from July 1, 2026, for foreign individuals, regardless of their residency status in Vietnam, any income arising from real estate transfer activities in Vietnam shall be subject to a personal income tax obligation calculated at a flat rate of 2% on the transfer price.
The maintenance of the 2% flat tax rate on the transfer value during the transition to the Law on Personal Income Tax 2025 is not merely a technical provision; it also conveys a strong message regarding Vietnam’s policy stability for international investors. Crucially, the milestone of July 1, 2026, marks the uniform application of the 2% tax rate for both residents and non-residents. This completely eliminates the need to determine physical presence status in Vietnam for tax calculation purposes, enabling foreign individuals to easily conduct financial planning and estimate net profits right from the inception of a project.
Although the tax rate remains stable at 2%, investors’ risks will shift towards the determination of the “transfer price”. With the market-based land pricing mechanism introduced by the Land Law 2024, taxable prices will be subject to stricter scrutiny. Therefore, “legal safety” can only be guaranteed when investors execute transactions based on actual values, rather than the previously common practice of dual pricing.
4. Necessary documents in the real estate transfer process
Pursuant to point c, clause 2 and point d, clause 3, Article 3 of Decree No. 95/2024/ND-CP, foreign individuals, when exercising housing ownership rights in Vietnam, must satisfy the conditions regarding documents proving their eligibility for housing ownership. Specifically, foreign individuals must possess a valid foreign passport bearing a Vietnamese entry stamp or equivalent legal documents proving lawful entry into Vietnam at the time of executing the housing transaction. Concurrently, foreign individuals must provide a written commitment stating that they do not fall under the category of subjects entitled to diplomatic or consular privileges and immunities in accordance with Vietnamese law.
In addition to the aforementioned documents, the dossier for executing real estate transfer procedures must still comprise standard documents as prescribed by land and housing laws, including: an application for registration of land use right changes; a legally notarized or authenticated transfer contract; the original Certificate of land use rights, ownership of houses and other land-attached assets; identification documents of the relevant parties; and other documents as required by the competent State authority in each specific case.
In conclusion, the new legal framework introduced by the Land Law 2024, the Housing Law 2023, and the roadmap of the Law on Personal Income Tax 2025 are shaping a transparent and highly potential investment landscape for foreign individuals. Although direct access to land plots remains a strict legal barrier for foreign individuals, ownership of commercial housing has become more accessible and flexible through intra-community transfer mechanisms and the continued application of the 2% tax policy.
Time of writing: May 08, 2026
The article contains general information which is of reference value. In case you want to receive legal opinions on issues you need clarification on, please get in touch with our Lawyer at info@cdlaf.vn
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- How Does the Draft Decree on Administrative Sanctions for Personal Data Violations Regulate Acts and Penalties? (Part 2)
- How Does the Draft Decree on Administrative Sanctions for Personal Data Violations Regulate Acts and Penalties? (Part 1)
