Buying off-plan in Vietnam: VAT, maintenance fund, payments

Buying a new apartment from the developer is a primary-market purchase (thị trường sơ cấp). The price a developer lists is usually before tax, and a few charges sit on top. If the building is not finished yet, an off-plan property (nhà ở hình thành trong tương lai), you pay in instalments, and the law limits how much each one may be.

Value-added tax

The developer charges value-added tax (VAT) of 10% on the sale price 1. The law leaves the deductible land value out of the taxable price, so the VAT on your invoice may come to less than 10% of the full price. The calculator applies 10% to the whole pre-VAT price, because a buyer cannot know the land value of a single unit. Its figure may therefore be slightly above the real tax.

Maintenance fund

The maintenance fund (phí bảo trì) is 2% of the apartment’s pre-VAT price 2. It is collected separately from the price and pays for upkeep of the building’s shared parts. It is not the monthly management fee.

Registration fee

When you register ownership, you pay the 0.5% registration fee 3. For an apartment bought from a developer, it is charged on the contract price including VAT and excluding the maintenance fund. Because the seller is a company, there is no personal income tax on the transfer, unlike a purchase from an individual.

The payment schedule

For off-plan homes, Vietnam’s Law on Real Estate Business 2023 sets these limits (official text on the Government portal):

• The deposit is at most 5% of the price, and the developer may take one only once the home meets the legal conditions to be sold (Article 23, clause 5).
• The first payment is at most 30% of the contract value, deposit included. Later payments follow construction progress, but the total before handover is at most 70% of the contract value, or 50% when the seller is a foreign-invested company of the kind the law specifies (Article 25, clause 1).
• Until you receive the ownership certificate, the seller may not collect more than 95% of the contract value. The rest is paid when the certificate is issued (Article 25, clause 3).
• Before selling off-plan homes, the developer must have a bank’s approval to guarantee repayment if the home is not handed over as promised. When you sign, you choose whether to take the guarantee letter (Article 26).

A draft amendment proposes dropping some of these limits. On the check date at the top of this page it had not been passed, so the limits above still apply. Check the text in force before you sign.

Before you sign

• Ask whether the listed price includes VAT and the maintenance fund.
• Compare the payment schedule in the contract with the limits above.
• Ask about the bank guarantee letter for your unit.
• If a loan will fund the instalments, ask the bank how it pays out in stages and when interest starts.