7 Questions To Help You Understand The Rules When Buying A House

When are home sales legally valid? Who should take responsibility for transferring the name of the red book when buying and selling houses?

Answer these 7 questions right away, you will know if you are familiar with the rules of buying or selling houses.

Question 1: Does the house purchase document have to be notarized for legal sale?

Under Clause 3 of Article 167 of the Land Law 2013, contracts and documents on the exercise of the rights of land users must be notarized or authenticated, including transfer, donation, use of land and assets attached to land.

The house purchase or sale papers must be notarized or authenticated according to regulations

In addition, documents on the inheritance of land use rights, land use rights and assets attached to land must also be notarized or authenticated according to regulations.

The notarization shall be carried out at the notarization practice organizations, the authentication shall be carried out at the commune-level People’s Committees.

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Question 2: Are notarized red books valid when selling a house?

According to Land Law 2013, the house purchase contract must be notarized or authenticated.

In order to notarize sale and purchase contracts, the buyer and the seller prepare the following documents:

• Original house papers (ownership or use right certificates or copies of substitute papers are prescribed by law for assets which, according to law, must be registered for ownership or use rights in schools. Contract or transaction related to such property;
• The originals of the buyer’s and seller’s identification.
• Original documents related to land parcel such as tax declaration, … (if any).
• The draft contract, transaction that the parties prepare.

The house purchase contract must be notarized or authenticated

Question 3: Who is responsible for transferring the name of the red book when buying and selling houses?

Paragraph 2 of Article 120 of the Housing Act 2014 stipulates:

* The parties agree to let a party submit a dossier requesting the competent state agency to grant a certificate for such house.

* In case of purchase or hire purchase of houses of project investors, the investors shall have to carry out the procedures so that the competent State grant the certificates to the purchasers. Expect, The purchaser voluntarily completes the application for a certificate.

Question 4: Do the authorities issue red books to new owners when procedures are not completed?

According to Decree January 2017 / ND-CP, effective from March 3, the case of transfer of land use right but not yet named shall be issued with a certificate of land use right and house and asset ownership.

Question 5: How long do you lease a house, you must notarize the contract?

According to the Civil Code, rental contracts must be made in writing, if the lease duration is 6 months or more, they must be notarized or authenticated and must be registered, unless otherwise provided for by law.

Question 6: Is the house issued a red book when buying a house with handwritten paper?

Real estate purchase paper was handwritten before July 1, 2014 will be issued red book

According to the decree January 2017 / ND-CP, from March 3, land and sell paper handwritten before July 1, 2014 is also issued a ‘red book’. Specific:

* People are using land transferred or donated from January 1, 2008 to before July 1, 2014 (the effective date of Land Law 2013), and documents on land use rights, they are granted a certificate of land use right, ownership of houses and other assets attached to the land (the title of title to house and land) for the first time without having to carry out procedures for the transfer of land use rights.

* People are using land transferred or donated before January 1, 2008, using land inherited before July 1, 2014 (without papers on land use rights). They are also issued with certificates of land use rights, ownership of houses and other assets attached to land, which is not required to carry out procedures for the transfer of land use rights. The dossier-receiving agencies must not compel the transferees to submit contracts or documents on the transfer of land use rights according to regulations.

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Question 7: Does the seller have to pay personal income tax?

According to the Law on Personal Income Tax amended and supplemented in 2012, income from transfer of land use rights and assets attached to land is also one of the types of taxable income. There are two ways to determine the personal income tax that landlords and land-attached assets must pay as follows:

Option 1: personal income tax = 25% of profit (selling price – purchase price)

• Price: is the price stated in the transfer contract
• Purchase price: The purchase price is determined based on the price stated in the sale and purchase contract. For houses not originating from the transfer or acquisition, they shall base themselves on the dossiers on the performance of financial obligations to the State at the time of being granted the house ownership or use right certificates.

Option 2: Applicable in cases where the purchase price can not be determined (the case where the actual price or the price stated in the low transfer contract of the land price can not be determined by the provincial-level People’s Committee at the time of transfer. The transfer price is determined based on the land price table prescribed by the provincial-level People’s Committee.)

Personal income tax = 2% transfer price.

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