For first-time condo buyers, the process of buying is often one of the most important and daunting steps. It can bring about feelings of worry and confusion. This article by ZoomLand answers common questions related to the legal procedures for first-time condo buyers.

Security Deposit for Buying a Condo

The security deposit is proof of the buyer’s financial readiness and willingness to proceed with the transaction. The deposit is usually a small portion of the condo price and is deducted from the final payment.

Process of Paying a Security Deposit for a Condo

  1. Step 1: Review the condo and location.
  2. Step 2: Negotiate with the developer and sign a deposit agreement. This can be done during or after the sales launch. A consultant will assist with the deposit process and address any concerns.
  3. Step 3: Sign a purchase contract when the condo foundation is completed. If the foundation isn’t finished, proceed with the deposit agreement as in Step 2.
  4. Step 4: Make the final payment as agreed. Payment can be made in cash or via bank transfer.
  5. Step 5: Receive the condo handover. Bring identification for verification.
  6. Step 6: Obtain the ownership certificate (red book) and complete the final steps.

Security Deposit Timeline

The timeline for paying a security deposit is not strictly regulated by law and depends on the agreement between the buyer and seller. It typically ranges from 30 to 60 days to allow both parties time to finalize preparations for the transaction.

Deposit Amount for Buying a Condo

The deposit amount typically ranges from 50 to 100 million VND per condo unit. Buyers should also bring identification documents (ID card or citizen’s ID) and a reservation form (if available). Developers like Vinhomes may require a 50 million VND deposit.

Legal Regulations on Condo Deposit

According to Article 328, Clause 2 of the 2015 Civil Code, the handling of the deposit is as follows:

  • Signed purchase contract: The deposit can either be refunded to the buyer or deducted from the final purchase price.
  • Buyer decides not to proceed with the condo purchase: If the buyer decides not to buy, the deposit will belong to the seller.
  • The seller decides not to sell the condo: The seller must return the deposit along with an additional amount equal to the deposit unless otherwise agreed.

Signing a Condo Purchase Contract

Documents Required for the Seller

  • Personal identification (ID card or Citizen’s ID) of the seller. If the condo is jointly owned by both spouses, documents from both must be provided.
  • Household registration book and marriage certificate (if applicable).
  • Land use rights certificate or property ownership certificate (red book).

Documents Required for the Buyer

  • Personal identification (ID card or Citizen’s ID) of the buyer. If married, both spouses’ identification documents are required.
  • Household registration book and marriage certificate (if applicable).

Transfer of Condo Purchase Contract

  • With red book: The transfer can be done directly at the notary office by both the buyer and seller.
  • Without red book: According to Clause 2, Article 123 of the 2014 Housing Law, if selling a condo without a red book, the seller must have the handover record and the purchase contract with the developer, as well as an approval letter from the developer and tax receipts.

Taxes and Fees When Buying a Condo

Payment Obligations

According to the law, both parties must pay taxes to the state when transferring or purchasing a condo.

Taxes and Fees to be Paid

  1. Registration Fee: The registration fee applies to those transferring ownership of assets through purchase, sale, inheritance, or donation. This must be declared and paid to the tax authority before the asset is used.
  2. Land Use Rights and Property Ownership Certificate Fee: The fee for obtaining this certificate is determined by the People’s Council of the province or centrally governed city (according to Article 3, Clause 5 of Circular 85/2019/TT-BTC).
  3. Notary Fee for Condo Purchase Agreement: The notary fee is based on the total value of the property or the sales contract value, as outlined in Circular 257/2016/TT-BTC.
  4. Personal Income Tax: The seller is required to pay a personal income tax of 2% on the contract value and the value of the property. Certain situations may be exempt from this tax.

Exemptions from Personal Income Tax

Inheritance or Gift Situations: These transactions are exempt from personal income tax when conducted between family members as mentioned above. The seller or income earner is responsible for paying the tax unless otherwise agreed with the buyer.

Case 1: When the sale is conducted between individuals in the following relationships: husband and wife, biological parents and children, adoptive parents and adopted children, in-laws, grandparents and grandchildren, or siblings.

Case 2: The seller only owns one property in Vietnam and has held it for at least 183 days from the date of the land use rights certificate issuance. The seller must report this to the authorities, and any violations will be subject to tax adjustments or penalties.