Vietnam Considers Apartment Ownership Period Reform: A Look at International Precedents

Vietnam's Communist Party Central Executive Committee has outlined directions for amending the Land Law and related legislation. As part of this amendment process, the regulations concerning the ownership period of apartments (condominiums) are expected to be reviewed. While current laws do not explicitly set a maximum ownership period, future legal amendments may consider setting periods based on the building's lifespan and establishing procedures for renewal upon expiration. This move is anticipated to significantly impact Vietnam's domestic real estate market, particularly apartment transactions and investments in urban areas. It is a crucial issue that also concerns the long-term housing ownership prospects of citizens. Internationally, regulations on apartment ownership periods vary widely by country: In China, urban land is state-owned, and land use rights for housing are capped at 70 years. Facilities for industrial use have 50 years, and commercial facilities have 40 years. In the past, a proposal in Wenzhou to charge owners up to one-third of the property's value for renewal when a 20-year land lease expired sparked significant opposition. This issue also led to a stagnation in real estate transactions. Subsequently, a measure was introduced for 20-year land leases to be automatically renewed free of charge, but legal frameworks are still under development. In Singapore, the majority of land is government-owned, and over 80% of the population resides in Housing & Development Board (HDB) flats built by the government. These HDB flats typically have a 99-year ownership period. This is a measure to allow land to be reused and redeveloped for future generations of Singaporeans, given the country's limited land area. HDB flats can undergo two renovation programs (HIP) at approximately 30 and 60-70 years of age. In the future, a "Voluntary Early Redevelopment Scheme" (VERS) is planned, where residents of flats nearing 70 years of leasehold will vote on whether the government should acquire and redevelop the area early. The 99-year period also applies to condominiums built by private developers. In Hong Kong, known for its extremely high real estate market, land leases are typically 50 years, with a possible extension of another 50 years without additional payment beyond annual rent. In Canberra, Australia, a 99-year leasehold period is also common. In the UK, leasehold (ownership of property for a specified period) is common, with ownership reverting to the original landowner upon the expiry of the term. Apartments can typically have their leases extended by 90 years, and houses by 50 years. Vietnam's revision of apartment ownership periods is expected to be guided by these international examples, balancing the protection of citizens' rights, the stability of the real estate market, and sustainable urban development.