Decree No. 123/2007/ND-CP dated July 27, 2007 of the Government on endments to Decree 188/2004/ND-CP the Government dated November 16, 2004 on price determination methods and price frameworks for all types of land

DECREE

ON ENDMENTS TO DECREE 188/2004/ND-CP OF THE GOVERNMENT DATED 16 NOVEMBER 2004 ON PRICE DETERMINATION METHODS AND PRICE FRAMEWORKS FOR ALL TYPES OF LAND

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated 25 December 2001; Pursuant to the Law on Land dated 26 November 2003;
Pursuant to the Ordinance on Prices dated 26 April 2002; Having considered the proposal of the Minister of Finance;

DECREES:

Article 1. To amend a number of articles of Decree 188/2004/ND-CP of the Government dated 16 November 2004 on price determination methods and price frameworks for all types of land (hereinafter referred to as Decree 188) as follows:

1. To amend article 2.1(dd) as follows:

"(dd) Calculation of the value of land use rights for collection of registration fees in accordance with law."

2. To amend article 3.2 as follows:

"2. Actual market price for assignment of land use rights in normal conditions at any one specified time means the amount of Vietnamese dong for a land area unit depending on its particular legal use purpose, formed from the results of actual completed transactions in the nature of common transactions between assignors and assignees in normal commercial conditions, without any effect of elements suddenly and inappropriately increasing or decreasing the price such as speculation, natural calamity, enemy destruction, financial or economic crisis, change in zoning, a forced assignment, a blood relationship assignment, an assignment with incentives or an assignment in other cases as stipulated by the Ministry of Finance."

3. To add clauses 3 and 4 to article 4 as follows:

"3. Deduction method is a method of determining the land price of a parcel of land with assets attached, by deducting the value of the assets attached to the land from the aggregate value of the real estate (comprising the value of the land and the value of the assets attached to the land).

4. Surplus method is a method of determining the land price of a vacant parcel of land with potential for development pursuant to zoning or permission to convert its use purpose for use in the best way, by deducting the estimated development costs from the aggregate value of the real estate assuming it to have been developed as proposed."

4. To amend and add to article 5 as follows:

(a) To add new clauses 3 and 4 after clause 2 as follows:

"3. The deduction method shall be applied to determine the land price of a parcel of land with assets attached when there is insufficient data on the market price of similar vacant land so as to apply the direct comparison method, and where it is possible to collate data on the market price of parcels of land with assets attached similar to the parcel of land being valued.

4. The surplus method shall be applied to determine the land price of a vacant parcel of land with potential for development pursuant to a change in zoning or conversion of use purpose, where there are no similar market prices of assignment of land use right so as to apply the direct comparison method."

(b) Clause 3 shall be amended to become clause 5 as follows:

"5. The provincial people's committee shall, on the basis of the specific market status and collected data, select an appropriate method from the price determination methods stipulated in Decree 188 and in this Decree in order to value local land. Where necessary, different price determination methods may be combined in order to determine specific land price levels."

(c) Clause 4 shall be repealed.

5. To amend article 6 as follows:

"Article 6 Price frameworks of all types of land

1. Land price frameworks issued with this Decree shall apply to all types of land classified in article 6 of Decree 181/2004/ND-CP of the Government dated 29 October 2004 implementing the Law on Land (hereinafter referred to as Decree 181) as follows:

(a) With respect to the agricultural land category:

- Price framework of land for planting annual crops (Table 1);

- Price framework of land for planting perennial crops (Table 2);

- Price framework of forest land for production (Table 3);

- Price framework of land for cultivation of aquacultural products (Table 4);

- Price framework of land for salt production (Table 5);

- With respect to protective forest land and specialized use forest land, the provincial people's committee shall, on the basis of prices of forest land for production as already decided and the price determination method for forest land stipulated in article 10.1 of this Decree, determine the specific land price level;

- With respect to the other agricultural land stipulated in article 6.4(d) of Decree 181, the provincial people's committee shall, on the basis of prices of adjoining agricultural land as already decided and the price determination method for types of adjoining agricultural land stipulated in article 10.1 of this Decree, determine the specific land price level.

(b) With respect to non-agricultural land category:

- Price framework of residential land in rural areas (Table 6);

- Price framework of residential land in urban areas (Table 7);

- Price framework of non-agricultural land used for production or business purposes in rural areas (Table 8);

- Price framework of non-agricultural land used for production or business purposes in urban areas (Table 9);

- With respect to land for construction of offices of bodies and construction of works of professional institutions; land used for objectives of national defence and security; land used by religious organizations (comprising land used by religious organizations and land on which there are communal houses, temples, shrines, pagodas, worship halls and family shrines); and other non-agricultural land (including land on which there are museums, houses to preserve or display works of art, or houses of cultural and artistic compositions) the provincial people's committee shall, on the basis of prices of adjoining residential land or prices of land in the nearest neighbouring area (if there is no adjoining land) as already decided, and on the basis of the provisions in article 10.1 of this Decree, determine the specific land price level;

- With respect to land used for public purposes as stipulated in article 6.5(b) of Decree 181 and other non-agricultural land (including land for other private construction works which are not attached to residential land and which are not for business purposes; land with holiday homes, tents or farms for employees; urban land used for construction of houses for planting purposes including the form of planting not directly on soil; for construction of sheds to breed animals as permitted by law; for construction of stations and farms for agricultural, forestry, salt production and aquatic research and experiment; for construction of barns and buildings for family households and individuals to store agricultural produce, plant protection agents, fertilizer, machinery and other tools for agricultural production), the provincial people's committee shall, on the basis of prices of adjoining non-agricultural production and business land or prices of non-agricultural production and business land in the nearest neighbouring area (if there is no adjoining land) as already decided, and on the basis of the provisions in article 10.1 of this Decree, determine the specific land price level;

- With respect to land used for cemeteries and graveyards, the provincial people's committee shall, on the basis of prices of types of adjoining land as already decided, and on the basis of the provisions in article 10.1 of this Decree, determine the specific land price level;

- The price framework of land for cultivation of aquacultural products shall apply to land containing rivers, canals, channels, ditches, streams and specialized water surfaces for cultivation of aquacultural products; if such land is used for non-agricultural purposes or for non-agricultural purposes combined with cultivation and exploitation of aquacultural products, then the provincial people's committee shall, on the basis of prices of adjoining non-agricultural land or prices of non-agricultural land in the nearest neighbouring area (if there is no adjoining land) as already decided, and on the basis of the provisions in article

10.1 of this Decree, determine the specific land price level.

(c) With respect to unused land category:

With respect to types of land in respect of which the use purpose has not yet been determined (including unused plains, unused hills and mountains, and rocky mountains without forest), when a price is required, the provincial people's committee shall, on the basis of prices of adjoining land as already decided, and on the basis of the provisions in article 10.1 of this Decree, determine an appropriate price level. When the unused land is brought into use pursuant to permission of the competent authority, the provincial people's committee shall, on the basis of the price framework of land of the same type with the same use purpose as stipulated by the Government, determine a specific land price level.

2. The provincial people's committee shall, on the basis of the actual prices for assignment of land use rights in its locality, be permitted to decide on prices of specific types of land within the permitted limits higher by no more than twenty (20) per cent of the maximum price or lower by no more than twenty (20) per cent of the minimum price in the price framework of the same type of land as stipulated by the Government in article 5.1 of this Decree.

3. If in isolated cases in remote areas and in areas with difficult socio-economic conditions or poor infrastructure the actual market price for assignment of land use rights in such locality in normal conditions is less than the minimum price in the price framework of the same type of land as stipulated in article 5.1 of this Decree, then the provincial people's committee shall decide on the specific price level applicable in such locality and report thereon to the Ministry of Finance."

6. To amend and add to article 8 as follows:

(a) To amend the heading of article 8 as follows:

"Article 8 Principles for classification of rural residential areas for purposes of price determination"

(b) Clause 1(c) shall be amended as follows:

"(c) A mountainous region is a land area with a height which is higher than midlands, the great majority of which comprises high mountains and complex terrain. Population density is low, and infrastructure and conditions for production and circulation of goods are less favourable than midlands.

Communes in mountainous regions shall be classified in accordance with the above-mentioned special characteristics and in accordance with guidelines of the Committee of Ethnic Nationalities and Mountainous Regions (now the Committee of Ethnic Nationalities)."

(c)Clause 2 shall be repealed.

7. To amend and add to article 9 as follows:

(a) To amend the heading of article 9 as follows:

"Article 9 Determination of land regions and position of each specific type of rural residential land for purpose of land price determination."

(b) Clause 1(a) shall be amended as follows:

"(a) The land price of land for planting annual crops, land for planting perennial crops, land for aquaculture, forest land for production, specialized use forest land, protective forest land, and other agricultural land (as stipulated in article 6.4(d) of Decree 181) shall be stipulated by distinguishing the land position of three types of commune on the basis of their administrative boundaries: plains, midlands and mountainous communes. The land position shall be determined on the basis of the distance between the residence of the community of land users and the place where production takes place, the distance between the place where production takes place and the centralized market for the sale of such produce and the level of convenience of traffic. Distinguishing land positions shall be implemented by combining the distance factor with other factors such as the fertility of the soil, the terrain, climate, weather and irrigation conditions in the three areas of plains, midlands and mountainous communes according to their administrative boundaries at the commune level. Land position shall be determined on these principles: Land position class 1 shall apply to land where there is a distance between the residence of the community of land users and the place where production takes place, [and/or] a distance between the place where production takes place and the nearest centralized market for the sale of such produce and where traffic is most convenient. Land position class 2 and so on [3] shall apply where the distance is greater and the traffic less convenient."

8. To amend and add to article 11 as follows:

(a) To amend the heading of article 11 as follows:

"Article 11 Authority to classify areas, streets and land positions for purposes of price determination"

(b) To amend and add to the contents of article 11 as follows:

"Pursuant to the general provisions of articles 8, 9 and 10 of Decree 188 and articles 1.6 and 1.7 of this Decree, and based on the actual situation within its locality, the provincial people's committee shall provide the specific criteria for zoning, classifying and distinguishing land positions for the purpose of price determination.

Annually the provincial people's committee shall carry out an amendment of the classification of types of land, types of streets and of land positions upon any changes in zoning, or upon any investment in upgrading or new construction of infrastructure affecting the existing classification of types of land, types of streets and of land positions".

9. To amend and add to article 12.1(d) as follows:

"(d) Where areas of the same type of land which lie on the border of provinces are separated by a river, lake, channel, hill, gorge or mountain with a width of one hundred (100) meters or less, then such border areas shall be calculated from the bank of the river or channel, or edge of the lake, or foot of the hill, gorge or mountain to the inside of the administrative boundary of each province in accordance with sub-clauses (a), (b) and (c) of article 12.1 of Decree 188. Where the width of the river, lake, channel, hill, gorge or mountain is more than one hundred (100) meters, no border area shall be classified".

10. To amend article 13 as follows:

"Article 13 Price determination of specific land in localities

1. Upon 1 January each year, the provincial people's committee must:

(a) Make a decision on and publicly announce within its locality the classification of areas, streets and land positions in accordance with articles 8 to 11 inclusive of Decree 188 and clauses 6, 7 and 8 of article 1 of this Decree;

(b) Make a decision on and publicly announce within its locality the price frameworks applicable in its locality after submitting them to the people's council at the same level for its comment.

2. Specific price determination methods for each type of land:

Upon price determination for a type of land, the price framework of such type of land as stipulated by the Government shall be applied on the following principles:

(a) With respect to land for planting annual crops, land for planting perennial crops, land for aquaculture, forest land for production, protective forest land and specialized use forest land and other agricultural land: Land of class 1 land position in each region (i.e. plains, midlands or mountainous regions) shall have the highest price, and the subsequent classes from class 2 onwards shall have lower prices.

(b) With respect to land for salt production: land of class 1 position shall have the highest price, and the subsequent classes from class 2 onwards shall have lower prices.

(c) With respect to residential land, non-agricultural land used for production or business purposes and other non-agricultural land in rural areas: Land in zone 1 shall have the highest price, the subsequent zones from zone 2 onwards shall have lower prices.

In each zone, the land of class 1 position shall have the highest price, and the subsequent classes from class 2 onwards shall have lower prices.

(d) The land price in the following cases shall be determined as equal to the price of land for planting perennial crops in the same area within the province:

- Land with gardens and ponds and a house on the same parcel of land but which has not been stipulated as being residential land;

- Agricultural land within the administrative boundary of a ward, within the residential area of a township or in a rural residential area for which the boundaries have been fixed in zoning approved by the competent State body;

- In the case of agricultural land within the residential area of a township or in a rural residential area for which there is not yet approved zoning, the land price shall be determined according to the boundary of parcels of land with residential housing outside such residential area.

In the above cases the provincial people's committee may, on the basis of the actual situation within its locality, provide higher land price levels but the maximum level shall not exceed twice the highest price of land for planting perennial crops in land position class 1 in the same area as stipulated by such provincial people's committee.

(dd) With respect to non-agricultural land in rural areas which has a position situated along main traffic routes, traffic terminals, commercial zones, tourist resorts or industrial zones, the provincial people's committee shall, on the basis of the actual situation within its locality, provide an appropriate land price on the following principles:

- The land price of residential land as fixed by the provincial people's committee shall not exceed five times the maximum price in the price framework for residential land in rural areas stipulated by the Government;

- The land price of non-agricultural land used for production or business purposes as fixed by the provincial people's committee shall not exceed three times the maximum price in the price framework for non-agricultural land used for production or business purposes in rural areas stipulated by the Government".

11. To amend article 14.1(a) as follows:

"(a) Upon land price determination for areas bordering provinces and cities under central authority, the people's committees of provinces with such bordering areas shall, on the basis of the provisions of article 12.1 of Decree 188 and article 1.9 of this Decree, agree with each other on land prices and a plan for adjustment of land prices of border areas on the basis of the following principles:

- The border area of any one type of land shall be subject to the price framework of such type of land as stipulated by the Government;

- Where border areas have the same natural and infrastructure conditions and the same use purpose, then their prices shall be the same.

In special cases, when socio-economic conditions and the common infrastructure of each locality are different, land prices of border areas may be different but the maximum difference shall not exceed thirty (30) per cent".

12. To amend article 15 as follows:

"Article 15 Adjustment of prices of specific types of land in localities

1. When the competent authority amends land use zoning or planning, changes land use purposes, or changes categories of urban areas or types of streets and land positions, the provincial people's committee shall, based on current regulations, adjust appropriately land prices of the areas subject to the changes.

2. Applicable to cases when the State allocates land with collection of land use fees other than by the form of auction of the land use right or tendering for projects using land, [or] when the State recovers land [or] in cases where a State owned enterprise undergoing equitization selects the form of allocation of land and the land price stipulated by the provincial people's committee as at the time of allocation of land, as at the time of the decision to recover land, [or] as at the time of including the land value in the enterprise undergoing equitization is not close to the actual market price for assignment of land use rights in normal conditions, then the provincial people's committee shall, based on the actual market price for assignment of land use rights in its locality, make a decision on an appropriate specific land price level without being restricted by the provision in article 1.5 of this Decree.

3. In every case of authorized adjustment of land prices of a number of land positions, areas or types of land throughout the year, the provincial people's committee must prepare a plan and submit it to the same level people's council for the latter's opinion, and also report to the people's council at the next periodical meeting".

Article 2. Implementing provision

1. This Decree shall be of full force and effect after fifteen (15) days from the date of its publication in the Official Gazette.

2. The following are hereby repealed:

- Article 30.4 of Decree 109/2007/ND-CP of the Government dated 26 June 2007 on conversion of 100% State owned companies into shareholding companies;

- Articles 4.2, 5.1 and 6 of Decree 17/2006/ND-CP of the Government dated 27 January 2006 on amendments to the Decrees implementing the Law on Land and to Decree 187/2004/ND-CP of the Government dated 16 November 2004 on conversion of State owned companies into shareholding companies.

3. Provincial people's committees shall, on the basis of Decree 188 and this Decree, promulgate and publicly announce prices of specific types of land for application from 1 January each year.

4. Ministers, heads of ministerial equivalent bodies and Government bodies, and chairmen of provinces and cities under central authority shall be responsible for implementation of this Decree.

5. The Ministry of Finance shall provide guidelines for implementation of this Decree.

TABLES OF PRICE FRAMEWORKS OF ALL TYPES OF LAND
(Issued with Decree 123/2007/ND-CP of the Government dated 27 July 2007)

Table 1: Price framework of land for planting annual crops

Table 2: Price framework of land for planting perennial crops

Table 3: Price framework of forest land for production

Table 4: Price framework of land for cultivation of aquacultural products

Table 5: Price framework of land for salt production

Table 6: Price framework of residential land in rural areas

Table 7: Price framework of residential land in urban areas

Table 8: Price framework of non-agricultural land used for production or business purposes in rural areas

Table 9: Price framework of non-agricultural land used for production or business purposes in urban areas