For foreign property owners in Vietnam, it is important to understand in advance how the sale of a property takes place, what taxes need to be paid, and how to legally transfer funds abroad after the transaction.
Resale Options (Exit Strategies)
A foreign buyer has three main selling options:
1. Assignment of Rights under the Contract (Assignment of SPA / Chuyển nhượng Hợp đồng Mua bán)
Sale before the completion of construction and before signing the final hand-over certificate.
Procedure: Carried out through the developer, who terminates the old SPA and issues a new one in the name of the buyer.
Taxes: Personal Income Tax (PIT) payment is required at a rate of 2% of the sales price.
Liquidity: Depends on the developer's rules.
2. Sale After Handover (Without Pink Book)
Sale after receiving the keys, but before the Pink Book is issued.
Procedure: Similar to the assignment of rights, but with additional handover documentation.
Liquidity: High, as the apartment is ready for use.
3. Sale with Pink Book (Pink Book Transfer / Chuyển nhượng Sổ hồng)
The most reliable and liquid option.
Procedure: Carried out through a notary and the local DONRE (Department of Natural Resources and Environment / Land Registry).
Rights: The buyer (Vietnamese or foreign) receives direct ownership rights.
Liquidity: Highest demand on the secondary market.
Capital Gains Tax
When selling real estate (by any of the three methods), a foreign seller is required to pay personal income tax on the sale of real estate (capital gains tax).
Rate: 2% of the gross sales price (regardless of whether a profit was made).
Calculation: Tax is calculated based on the total amount specified in the assignment/sale contract, not on the profit.
Payment: Must be paid to the tax authority before the transaction is completed/notarized.
Repatriation of Funds
The main requirement for legally transferring funds from Vietnam after a sale is proof of the legitimate source of both incoming (purchase) and outgoing (sale) funds.
1. Requirement: Foreign buyers must transfer all payments (to the developer or seller) through their bank account in Vietnam or an international account with a direct transfer to the developer's account.
2. Documents for Repatriation:
- Incoming Transfers: Confirmation of all previous incoming bank transfers for the purchase (Proof of Inflow).
- Contract: Original or notarized copy of the Sale and Purchase Agreement (SPA/Assignment/Transfer Agreement).
- Tax Payment Confirmation: Document confirming the payment of capital gains tax.
- Bank Account: The proceeds from the sale must be deposited into an account in Vietnam opened in the seller's name.
3. Procedure: The bank in Vietnam will verify the entire chain of transactions and documents before allowing the conversion of VND into foreign currency and transfer abroad.
SUMMARY
The Vietnamese real estate market offers clear and structured rules for post-purchase management and exit. Compliance with tax regulations (10% on rental income, 2% on sales) and conducting all financial transactions through the banking system are crucial to ensuring legal ownership and the smooth repatriation of funds in the future.