The top legislative body agreed that more categories of overseas Vietnamese should be eligible to buy houses in Vietnam. Accordingly, Vietnamese expatriates with Vietnamese citizenship, those working in Vietnam with special skills necessary to meet domestic demand, those with Vietnamese visa exemptions and permission to reside in Vietnam for at least three months, and those with a Vietnamese spouse living in Vietnam will be allowed to buy houses.

The current regulations allow only those who have permanent resident status in Vietnam, those recognised as contributing to national development, scientists and cultural experts, and those who have resided in Vietnam for at least six months to buy houses.

According to the National Assembly's Standing Committee, the two articles' amendments would meet the longstanding desire of Viet Kieu to own property legally and would also help facilitate the implementation of the Politburo's policy to consider overseas Vietnamese an integral part of the Vietnamese nation.

Minister of Construction (MoC) Tran Hong Quan said the" National Assembly's approval of amendments might have an impact on the local real estate market, but would not create speculation since supply remained high.

MoC figures show that Vietnam builds an average of 37 million square metres of housing annually, including six million square metres in HCM City and two million in Hanoi.

"Now the more than three million Vietnamese residing abroad are able to buy houses in Vietnam. Only those who have demand, enough capital and meet all the requirements defined' by the Vietnamese laws can afford houses in the country," Quan said.

During the three years since the Housing Law took effect in 2006, only 140 Viet Kieu have bought houses in Vietnam. Around 70 percent of them have Vietnamese citizenship.

According to a government estimate, the number of overseas Vietnamese buying houses in the country will rise to 1,400 a year after the amendments are approved.

Vietnam's laws on personal income tax, value added tax, corporate income tax and the new property trading law are said to be strong enough to limit real estate speculation relating to overseas Vietnamese.

Nearly 20 percent of the $6 billion in remittances from overseas Vietnamese sent into the country in 2007 was reportedly used to buy houses in Vietnam under the ownership of their relatives and friends.

Vietnam Investment Review - June 23, 2009