Property maintenance in Vietnam
In Vietnam, property maintenance costs cover the land tax and utility bills. The owners of investment properties also pay a management company fee and a rental income tax.
Victoria Hoang, Sales and Leasing Manager at Indochina Capital, denotes that the owners of rental apartments in central Ho Chi Minh City pay the maintenance and management company fees of less than $1 per m²
Water and electricity costs for an 85 m² apartment run
In the case
Management company services
"Every apartment complex in Vietnam has its own management company in charge of public space, swimming pool, gym maintenance and security. The service fees depend on the building and are about $1 per m² per month on average," Victoria Hoang says.
There are also management companies that take care of apartment rentals. They charge up to 8% of the rental income.
Taxes in Vietnam are lower in comparison to those in the US and Western Europe. The owners of investment property pay the land tax at a rate of 0.03% to 0.15% (depending on the property size and municipality) and a rental income tax of 5% (+5% VAT) for individuals and 20% for businesses.
Upon selling, individuals pay 2% of the transaction value and legal entities pay 20% of the difference between the purchase and the sale price.
In Vietnam, property insurance is optional for buyers. However, insurance against natural disasters is popular. It costs around 0.1% of the property value per annum.
"In Vietnam, there is a law which obliges all developers to obtain a bank guarantee. The guarantee is issued to each property owner individually, and when an insured event occurs, the bank pays out the whole amount deposited by the buyer," notes Victoria Hoang.
The authorities of Vietnam allowed foreign investors to purchase property in Vietnam as late as in 2015. Most of the property on offer belongs to the new build market, and the apartments come in finished condition. The costs of repairs and furnishing are included in the property price range of between $6,000 and $12,000.