In this article we highlight everything about tax and fee on housing in Vietnam that you should know. The details in this article is up to date as of 2020. We will continue to update this article as there will be new laws and regulations. We also limit the scope of this article to residential property for individual investors, as this is, most of the time, the type of property you will deal with as a foreign buyer. If you you represent a company buying residential property, commercial property or industrial property, the taxes and fees will be different from those highlighted in this post. If it is your case, please contact us for more details, using the form at the end of this article
The Taxes and Fees for Buyers/Tenants
- 10% Value Added Tax (VAT): this is included in the selling price, if you buy off-plan property, directly from the developer. You will pay this tax during the buying process, proportionally with the payment schedule. This tax, therefore, will also be included in the price of all the future transactions, i.e., when you will resell to another owner later on. During the buying
- 0.5% Registration Fee: this is the fee paid to the Department of Natural Resources and Environment, a centralized government organization in Vietnam managing the property ownership. You will pay this fee upon receiving the certificate of ownership
- 2% Maintenance Fee: similarly to the 10% VAT, this fee is also included in the selling price during an off-plan property purchasing. This fee will go into a general fund to maintain the residential internal facilities of the building after completion: swimming pool, elevators, garden, gym, BBQ area, children garden etc.
- Management Fee: when a building will be completed and the residents move in, a committee will be organized to represent all the residents. The committee will decide to hire a dedicated company to manage a building, provide reception and perform the periodical maintenance. For some projects, the developer will assign the management company for the first years, after that it is up to the resident committee to decide to keep working with the current company or to find a new one. In any case, the management fee will be calculated based on the unit area and will be paid on a monthly basis. Typically, the fee can vary from $0.5-$1 per sqm. per month. When you will lease your apartment, the tenant is the one who will pay the management fee.
- Most of the time, the buyer/tenant will not pay agent fee. It is a common practice in Vietnam that the agent fee is covered by the seller/leaser. In some cases, if you work with an agent who helps you to find a unit to buy or an apartment to rent, you may want to encourage by paying her a fee. But that is all according to your goodwill.
The Taxes and Fees for Sellers/Leasers
In this section we assume the case that you are an individual seller or leaser.
- Personal Income Tax: 2% of the selling price when selling, and 10% of the rental when leasing.
- Agent Fee: It is a common practice in Vietnam that the seller will pay the agent fee of 2%-3% for selling, and 1 month rental for leasing. The agent selling fee used to be 1%, and in fact it is still applicable now (2020) However, if you want the agent will be dedicated, and actively market your unit, not just normal listing it on various online listing platform, the 2% is more favorable. 3% rate should be used only when you want to sell really quickly, and you may want to set the time limit for this higher rate.
In an another article, we will come back to the topic of leasing, renting and reselling, as well as working with the agents on the secondary market.