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Foreign organizations and individuals can now own up to 30 percent of the total apartments in a condominium, according to Decree 95/ND-CP, which took effect on August 1. This regulation marks a significant shift in Vietnam’s real estate market, offering more opportunities for foreign investment.
Key Provisions of Decree 95/ND-CP
Increased Ownership Cap for Condominiums
Under the new decree, foreign ownership is capped at 30 percent of the units in each block of a condominium, specifically in apartment complexes with multiple blocks sharing a common base. This change allows for greater foreign participation in Vietnam’s flourishing real estate market.
Ownership Limits for Independent Houses
For independent houses within designated areas with specified populations, foreign entities can own up to 250 units in a single housing development project. If the area has multiple projects, foreigners can distribute ownership across all projects, but the total must not exceed 250 houses. Once the 250-house cap is reached in one project, no further purchases can be made in that area. This regulation aims to balance foreign ownership and local housing needs.
Extension of House Ownership Duration
Foreigners wishing to extend their house ownership duration must submit an application to the provincial People’s Committee at least three months before the expiry date. The committee has 30 days to approve or reject the request, with the potential to grant an additional 50 years of ownership. This provision ensures that foreigners can maintain long-term investments in Vietnam’s real estate market.
Implications for the Real Estate Market
The increased ownership cap for condominiums and clear regulations for independent houses provide foreign investors with more opportunities and clearer guidelines for investing in Vietnam’s real estate market. This is expected to attract more foreign capital, boosting the market’s growth and development.
While the decree facilitates foreign investment, it also maintains limits to ensure that local housing needs are not compromised. The cap on ownership and the distribution limits for independent houses aim to balance foreign interests with the necessity of preserving adequate housing availability for local residents.
According to the Ministry of Construction, about 4 million foreigners and overseas Vietnamese (OVs) are expected to have a demand for housing in Vietnam in the future. The new decree caters to this growing demand while ensuring a regulated and balanced market.
Decree 95/ND-CP marks a significant step in Vietnam’s real estate regulations, enhancing opportunities for foreign investors while balancing the needs of local residents. By allowing foreign ownership of up to 30 percent of condominium units and setting clear guidelines for independent houses, the decree paves the way for a more dynamic and attractive real estate market. As the demand for housing among foreigners and overseas Vietnamese continues to grow, these regulatory changes are poised to support sustainable market development and economic growth.
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