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Comment by teamwork007 | Hacker News Reader

One piece of information the article doesn't acknowledge is that property rights in Vietnam aren't the same as they are in the US. So if a foreigner "buys" an apartment in Vietnam, they can only have it for up to 50 years. In other words, it's an asset that is steadily decreasing in value, and not one that the "owner" can necessarily hand down to the next generation at a higher or the same value unless changes are made to those laws.

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Well, you might be shocked to hear this is true of London as well. Very few areas have land you can buy without a land lease, called freeholds.

Large landowner (ex aristocrat) or government, what difference does it make? The land is forever not yours.

Are you sure that’s how it works? I thought the distinction was ownership versus lease.

You lease it for 50 years, but in the end you can sell the actual property to a citizen or sell it to a non-citizen who will get a 50 year lease.

There isn't much clarification around what will happen since it hasn't happened yet: http://vietnamembassy-usa.org/basic-page/land-regulations

The same is true for China and its 99 year apartment leases. Everyone is assuming the government will roll over the leases for minimal fees, or eventually repulsed the leases with a proper property tax, but nothing is guaranteed yet.

Huh. In Canada you can’t buy land on First Nation reserves. They do 99 year leases, but you buy and sell the home the same way as if you were buying the land as well, since the expectation is that the lease would be renewable for the foreseeable future.

Can they sell it at the end of those 50 years and buy something else? If so, I can't see why purchasing one would necessarily be steadily decreasing in value, except for the requirement of a rushed sale if you waited until the very last minute to sell.

Because you wouldn't get your money back at the end of that 50 years. If you sold it after 35 years, you would essentially be selling a 15 year contract to own the apartment, which would likely be factored into the resale price.

With that said, 50 year property rights are likely a stepping stone to something "better" since no one has hit that point yet, so the laws could change before then. However a lot of other things could change before then that might work against you (e.g.increase in corruption, attitudes towards foreigners could sour, property rights policies could revert back to less rights, etc).

Then wouldn't it work out to rent instead?

if the apartment is bought with his Vietnamese wife then it could be a freehold

Right.

Vietnam still is a communist country in that respect.

The government still owns all the land and is legally leasing it to its citizens and foreigners. In reality, now that Vietnam is increasingly open to the world economy the government has to treat property rights better or else it'll scare foreign investment away.

The lack of private property rights and the Vietnam's Communist Party stranglehold on the economy with their state owned enterprises is a huge drag on productivity and innovation.

Fortunately, it seems like things are improving.

Nothing to do with communism. Capitalist Thailand has thirty year limits on property ownership with the exemption of condo buildings that are majority owned by Thai citizens.

Hell even Singapore limits property ownership of foreigners.

I hate using the terms capitalist and communist since they are both pretty loaded, but I think in the case of Vietnam and China it does have something to do with their recent Communist or Socialist histories. Property rights are usually seen as the bedrock of a capitalist society for better or worse. Vietnam and China's land is technically still owned "by the people" (aka government) and since both countries have opened they have gradually loosened those rights. Singapore is often seen as an anomaly to people who see things on the capitalist/communist spectrum, but you're right they have rights similar to those seen in China and Vietnam and often cited as a model for those countries to provide more property rights without allowing for a 'Western' model.

Is New Zealand a communist country? They banned foreign ownership recently.

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