Ownership for foreigners nears, by National Assembly deputies20-06-2014
Phan Trung Ly, chairman of the National Assembly’s Legal Committee, said the committee agreed that foreigners, international organisations and overseas Vietnamese should have expanded home-ownership rights.
However, Ly said it was necessary to clarify how the expansion of ownership to foreigners would affect the housing ownership demand of local citizens.
According to Minister of Construction Trinh Dinh Dung, the current state of the real estate market revealed the shortcomings of the existing Housing Law which came into force eight years ago.
It was obviously necessary to amend and supplement the existing legislation based on the realities of the current situation, he suggested.
For instance, the current law imposes various limitations on home ownership for overseas Vietnamese, foreign individuals and organisations, making the property market completely unattractive to non-Vietnamese nationals.
Cao Sy Kiem, chairman of the Small and Medium Enterprises Association said that improved home-ownership rights for foreigners were reasonable, but the revised Housing Law should impose limitations on the number of houses a foreigner can have in Vietnam.
“I agree that the regulation should be eased, but it must retain legal barriers for management,” Kiem said.
Meanwhile, Dang Hung Vo, former Deputy Minister of Natural Resources and Environment urged that the revised Housing law should not limit the number of houses for foreigners.
“Increased ownership rights for non-Vietnamese nationals should have been expanded years ago,” Vo said.
“Some people said that the new policy could lead to speculation and a property bubble. I don’t see how, given the restrictions,” Vo said.
Vo claimed that all related factors of planning and financing policies, taxation, evaluation and credit policies must be carefully considered.
The revised Housing Law draft stipulates that foreigners can only own housing in commercial projects, including apartments and houses, but there is a foreign ownership quota of just 30 per cent of total apartments in a commercial apartment building, or 250 villas or semi-detached houses in a single commune or ward being owned by foreigners. Property ownership rights would extend for 50 years, with a provision that they could be further extended. Foreigners would also be allowed to rent out their properties, but the draft does not include any right to re-sell their properties.
“All of these factors must be co-ordinated in a master plan that can create transparency for the whole market,” Vo said.
Nguyen The Diep, chairman of the REENCO Song Hong said expanding ownership for foreigners was a basic reality given increased international integration.
“The offering of suitable regulations for foreigners to buy homes in Vietnam will be welcomed by other countries. This regulation will also make the country a more attractive investment destination because foreign developers may like to focus on foreigners when developing their projects in Vietnam,” Diep said.
Property developers have for many years focused on commercial apartment projects rather than budget home developments.
In relation to other parts of the bill, delegates said local authorities had paid insufficient attention to affordable home developments, so a great number of social policy beneficiaries and low-income people were not in a position to buy homes.
The existing Housing Law does not stipulate specific incentives for investment in the budget home segment, especially in big cities which have strong demand for housing, and policies for apartment building management.
Therefore, the amended law is expected to go some way towards resolving problems including planning, management, and restoration of apartment buildings, financing for housing development, and mechanisms or incentives to boost the development of social housing for low-income people.