Decree No. 123/2007/ND-CP amending and supplementing a number of articles of Decree No. 188/2004/ND-CP of 26 November 2004 on methods of determining land prices and price brackets of land of different categories

71 OFFICIAL GAZETTE 155ue n05 06·071AugU5t 2007 (C6ng Bao nos 554-555/August 12, 2007) DECREE No. 123/2007/ND·CP OF JULY27, 2007,AMENDINGAND SUPPLEMENTINGA NUMBER OF ARTICLES OF DECREE No. 18812004fND.CPOF NOVEMBER 16,2004,ON METHODS OF DETERMINING LAND PRJCF.SANJ) PRJf:F. RRACKF.TS OFLANJ) OFDIFFERENTCATEGORIES THE GOVERNMENT Pursuant to the December 25, 2001 Law on Organization ofthe Government; Pursuant to theNovember 26,2003LandLaw; Pursuant totheAp1i126, 2002 Price Ordinance; At theproposal ofthe Finance Minister, DECREES: Article 1.-To amendand supplement a number of articles of the Government's Decree No. 1881 2004/ND CP of November16. 2004,on methods ofdetermining landprices andprice brackets ofland of different categories (below referred to asDecree No. 188/2004/ND-CP for short)as follows: 1.Toamend Point e, Clause 1ofArticle2 into the following: eI Calculating the land use right value for the collection of registration fees in accordance with law." 2. To amend Clause 2 of Article 3 into the following: "2. The actual market price of land use right transfer undernormalconditions ataspecified point oftimemeansa VNDamount calculated perunitot landacreageusedfor a certainlawful purpose and formulated on the basis of the results of common actually completed transactions between transferors andtransferees undernormal commercial conditions and without the influence of factors that cause sudden irrational price rise or decrease, such as speculation, natural disaster. enemy sabotage. economic andfinancial crisis,change of planning, transfer under coercion, blood relations or preferential treatment andothercasesasprescribed hy theMinistry ofFinance." 3. To add the following Clauses 3 and 4 to Article 4: "3. Subtraction method means a method of determining the price of a land plot with attached assetsby subtracting thevalueof assetsattached to landfromthetotalvalueof therealestate(including the valueof landand the valueof attachedassets). 2. Surplus method means a method of determining the price of a bare land plot with development potential according to planning or permitted for change of the use purpose for the optimaluse by subtracting estimatedexpenses for the development from the total assumed value of development of therealestate." 4. To amend and supplement Ad/de 5 as follows: 'II To add new Clauses 3 and 4 following Clause 2: "3. The subtraction method applies to determining the price of a land plot with anacned assets inthecasedataonthemarketpricesofsimilar barelandplotsareinsufficient fortheapplication of thedirectcomparison methodwhileit ispossibleto collectdataon the marketpricesof landplotswith attached assets similarto the to-be-priced landplot. 4.Thesurplus methodapplies todetermining the land price of a bare land plot with development potential thanks tochange ofplanning orusepurpose when the similar market price of land use right transfer isunavailable fortheapplication ofthedirect comparison method." bl Clause 3 is amended into the following Clause 5: © VIETNAM LAW & LEGAL FORUM Issue nos 06·071Augus12007 (C6ng Baa nos 554-555/August 12, 2007) OFFICIAL GAZETTE 77 "5. Basing themselves on the practical situation of the market and the gathereddata, provincial-level People's Committees shall select an appropriate land price determination method among those defined in Decree No. 188/2004!ND-CP and this Decree for determining land prices in their localities. In case of necessity, several land price determination methods may be combined for determining specific land prices." c/ To annul Clause 4. 5. Toamend Article 6 as follows: "Article 6.- Price brackets of land of different categories 1. The. land price.brackets issn".c1 together with this Decree apply to land categories classified under Article 6 of the Government's Decree No. 181/20041 ND-CP of October 29,2004, un tilt: implementauon of the Land Law (below referred to as Decree No. I81/2004/ND-CP) including: a/ For the group of agricultural land: The annual crop land price bracket (Table 1); The perennial tree land price bracket (Table 2); The production forest price bracket (Table 3); The aquaculture land price bracket (Table 4); The salt-making land price bracket (Table 5); For protection forest land and special-use forest land, provincial-level People's Committees shall base themselves on the decided production forest land and the method of determining production forest land prices stated in Clause 10, Article 1 of this Decree to determine specific price levels. For other categories of agricultural land stipulated at Point e, Clause 4, Article 6 of Decree No. 18112004!ND-CP, provincial-level People's Committees shall base themselves on the decided prices of adjacent agricultural land areas of different categories and the method of determining prices of adjacent agricultural land of different categories stated in Clause 10, Article 1 of this Decree to determine specific price levels. bl For the group of non-agricultural land: The rural residential land price bracket (Table 6); The urban residential land price bracket (Table 7); The rural non-agricultural production and business land price bracket (Table 8); The urban non-agricultural production and business land price bracket (Table 9); For land used for the construction of working offices and land used for the construction of non business works; land used for defense and security purposes; land used for religions and beliefs (including land used by religious establishments, land with communal houses, temples, shrines, small pagodas, ancestral worship halls or houses); other non-agricultural land (including land for the construction of museums, conservation centers, art works display halls, and cultural and art composition facilities), provincial-level People's Committees shall base themselves on the decided prices of adjacent residential land areasor prices ofthe nearest residential land areas (if adjacent land areas are unavailable) and the provisions of Clause 10, Article 1 of this Decree to determine specific price levels. For land used for public purposes stipulated at Point b, Clause 5,Article 6 of Decree No. 18112004/ ND-CP and other categories of non-agricultural land (including land for other construction works owned and used by individuals for non-business purposes and not associated with residential land; land used for the construction of makeshift houses and tents for workers; urban land used for the construction of houses for agricultural purposes, including cultivation not directly on land; land tor the construction of facilities for raising animals permitted by law; land for the construction of laboratories devoted to agricultural, forestry or aquacultural researches and experiments; land for the construction of warehouses and houses of © VIErNAM LAW & LEGAL FORUM 78 OFFICIAL GAZETTE Issue nos 06·07/Augus12007 (C6ng Bao nos 554-555/Augusf 12, 2007) families and individuals for storing agricultural products, plantprotection drugs, fertilizers, machines andtoolsofagricultural production), provincial-level People's Committees shallbase themselves on the decided price of non-agricultural pronuction ann businessland in adjacent areasor the nearest areas (in case adjacent areas are unavailable) and the provisions of Clause 10,Article 1of thisDecreeto determinespecific pricelevels; For land used for cemeteries or grave yards, provincial level People's Committees shall base themselves on the decidedprice of adjacent areas and the provisions of Clause 10,Article 1 of this Decreeto determine specific price levels. Forrivers, canals, ditches, trenches andstreams andwatersurfaces exclusively usedforaquaculture, the aquaculture landpricebracketis applied; if they are usedfornon-agricultural purposes or for a non agricultural purpose combined with aquaculture, provincial-level People's Committees shall base themselvesonthedecided priceofnon-agricultural land in adjacent areasor the nearestareas (in case adjacent areas are unavailable) and the provisions of Clause 10,Article I of this Decree to derermine specificprieelevels. cJFor thegroupof unused-land For categories of land with unidentified use purposes (including unused deltaland, unused hilly and mountainous land, rock mountains without forests), when itisnecessary todetermine theirprices, provincial-level People's Committees shall base themselves onthedecided price ofadjacent landareas and the provisions of Clause 10, Miele 1 of this Decree todetermine appropriate prices. When unused land is put to use under permission of competent authorities, provincial-level People's Committees shall baseOIl theGovernment-stipulatedpricebracket oflandofthesame category andthesameusepurpose todetermine specific pricelevels. 2.Basingthemselves ontheactual landuseright transfer prices in their localities, provincial-level People's Committees may decide on specificland priceswhich must be neither 20% higherthan the maximum price level nor 20% lower than the minimumprice levelof theGovernment-stipulated pricebracketof landof thesamecategory inClause 5, Article I of this Decree. 3.Inspecial cases, indeep-lying andremote areas, inareas with difficult socio-economicconditions and poor infrastructure, if the actual land use right transfer prices on local markets under normal conditions are lowerthan the minimumprice level of the price bracket of land of the same category stipulated in Clause 5. Article 1 of this Decree. provincial-level People's Committees shalldecide onspecific pricelevelsappliedin theirlocalities and reportthemto theMinistryof Finance." 6. To amend and supplement Article 8 as follows: aI To amend the title of Article 8 into the following: "Article 8.- Principles on rural land region classification for land pricedetermination" bl To amend Point c of Clause I into the following: He! Mountain regionisa landregion lyinghigher thanthemidlandregion,consisting largely of high mountain areas with complicated terrain. Its population density is low; its infrastructure and conditions forgoodsproduction andcirculation are Jess convenientthan those in the midlandregion. Mountain communesareclassified according to the above basic criteriaand under the guidanceof theCommittee forEthnicandMountainous Affairs (now the Committeefor EthnicAffairs)." e!To annulClause2. 7. To amend and supplement Article 9 as follows: aI To amend the title of Article 9 into the following: © VIETNAM LAW & LEGAL FORUM Issue nos 06.071Augusl 2007 (C6ng Bao nos 554-555/August 12, 2007) OFFICIAL GAZETTE 79 "Article 9.- Determination of land regions and positions of land of every specific category in rural areas for land price determination" bl To amend Point a of Clause I into the following: "at For annual crop land, perennial tree land, aquaculture land, production forest land, protection forest land, special-use forest land and other agricultural land (as stipulated at Point e, Clause 4, Article 6 of Decree No. 181/2004/ND-CCP), different land prices are set on the basis of the land position of three types of commune classified according to their adminisuative territories: delta, midland and mountain. The position of land is determined based on the distance from the place of residence of the land users' community to the place of production, the distance from the place of production to a major outlet and the degree of convenience of communications. Differentiation of land positions is based on the factor of distance combined with the factors of soil features, terrain, climate, weather and irrigation conditions of each region: delta, midland and mountain, classified according to communes' administrative territories, The position of land is determined on the principle that position No. I applies to land areas where the place of residence of the land users' communitytothe place of production and the distance from the place of production to a major outlet are nearest and where communications are most convenient. This position is followed by positions from No.2 onwards characterized by longer distances and less convenient communications." 8. To amend and supplement Article 11 as follows: at To amend the title of Article 11 into the following: "Article 11.-Competence to classify land regions, street grades and land positions for land price determination" bl To amend and supplement Article 11 as follows: "Basing themselves on the provisions ofArticles 8,9 and 10 of Decree No. 18112004/ND-CP and Clauses 6 and 7, Article 1 of this Decree and the practical situation of each locality, provincial-level People's Committee shall issue specific criteria and prescribe the classification of regions, kinds and positions of land as bases for land price determination. Annually, provincial-level People's Committees shall readjust land categories, street grades and land positions upon any planning change or tnvestment in upgrading or construction of infrastructure that affects the currently applied land categories, street grades and land positions." 9. To amend and supplement Point d, Clause 1 of Article 12 into the following: "d1 In case the adjacent land areas of the same category between two provinces are separated by a river, lake, canal, hill, mountain pass or mountain of a width of 100 meters or less. the adjacent land areas shall be determined as stretching from the bank of the river, lake or canal or the foot of the hill, mountain pass or mountain into the administrative territory of each province under Pointe a, band c, Clause 1, Article 12 of Decree No 18812004/ND CPo If the river, lake, canal, hill, mountain pass or mountain is over 100 meters in width, it is not categorized as adjacent land." 10. To amend Article 13 into the following: "Article 13.- Determination of specific land prices in localities J On January J every year, provincial-level People's Committees shall: atDecide on and publicize in their localities the classification of land regions, street grades and land positions under the provisions of Articles 8, 9, 10 and 11of Decree No. 188/2004/ND-CPand Clauses © VIETNAM LAW & LEGAL FORUM 80 OFFICIAL GAZETTE Issue nos 06·07IAugus! 2007 (Cong Bao nos 554-5551August 12, 2007) 6, 7 and 8,Article I of this Decree. blDecide on and publicize in their localities the land price brackets applied in their localities after submitting themtothePeople'sCouncils ofthesame level for comments. 2.Methodsofdetermining specific prices forland of each category Land of a certaincategoryis subjectto the price bracket stipulated by the Government for land of that category 011 the following principles: aJ For annual crop land, perennial tree land, aquacultureland.production forestland,protection forest land special-use forest land and agricultural landof otherkinds: Landatposition I ineachregion (delta,midlandor mountain) has the highestprice; land at positions from No.2 onwards has correspondinglowerprices. bl For salt-makingland:Land at positionNo. I has the highest price; land at positionsfrom No.2 onwardshas corresponding lower prices. cl For residential land, non-agricultural production and business land and non-agricultural land of other kindsin rural areas: Land in region 1 has the highest price; land in regions from No.2 onwards hascorresponding lower prices. In each landregion,the priceof land at position No. I has the highestprice; land in positionsfrom No.2 onwardshas corresponding lower prices. d/ In the following cases, the land price is equal to the price of perennial crop land at positionNo.1 in the same regionin a province: Garden and pond land lying in the same land plot with a house which is not determined as n:siUeutiailand; Agricultural landlyingwithintheadministrative boundariesof a ward, withinthe residential areaof a township or a rural residential area already delimited under a planning already approvedby a competentstateagency; For agricultural land lying withina residential areaof a townshipor arural residential areawithout an approved planning, it shall be determined according to the boundaries of the outermost land plot with a house in the residential area; Based on the practical situation in their localities, provincial-level People's Committees may prescribe higher prices in the above cases which, however, must not exceed twice the price of perennial tree land at position No. I in the same region already set by provincial-level People's Committees. 101 For rural non-agricultural land lying along main roads, traffic hubs. trade zones. tourist resort or industrial parks, provincial-level People's Committeesshall base themselves on the practical situationin their localitiesto prescribeappropriate land prices on the principles that: Forresidential land,thepricessetbyprovincial levelPeople's Committeesmustnotexceed5 times themaximumpricelevelin theruralresidential land bracketstipulatedby the Government; For non-agricultural production and business land, the prices set by provincial-level People's Committees mustnot exceed3 timesthe maximum pricelevelof the rural land price bracketstipulated by the Government." 11. To amend Point a, Clause 1 of Article 14 into the following: atWhendetermining theprices of landinadjacent areasbetweenprovincesor centrallyrun cities, the People's Committees of the provinces with these adjacent land areas shall base themselves on the provisions at Clause 1, Article 12 of Decree No. 188/2004/ND-CP and Clause 9, Article 1 of this Decree to reach agreement on the land prices and plans on adjustment of land prices in the adjacent areas on the principlesthat: © VIETNAM LAW & LEGAL FORUM Issue nos06·07JAuguSI2007 (C6ng BaD nos 554-5551August 12, 2007) OFFICIAL GAZETTE 81 For adjacent land areas of a certain category, the price bracket stipulated by the Government for such category is applied; For adjacent land areas with the same natural conditions, infrustructurc and usc purposes, their prices are the same; In special cases, when economic and social conditions and common infrastructures in two localities are different, the prices in adjacent areas may differ by 30% at most." 12. To amend Article 15 into the following: "Article 15.- Adjustmentof specific prices ofland of different categories in localities 1.When competent authorities adjust land use plannings or plans, change land use purposes, change urban center grades, street grades or land positions, provincial-level People's Committees shall adjust the prices of land in regions where such changes occur as appropriate according to current regulations. 2. In case of allocation of land by the State with collection ofland use levy not through land use right auction or bidding for projects involving land use, land recovery by the State or allocation of land as selected by equitized state enterprises, If land prices prescribed by provincial-level People's Committees at the time of land allocation, issuance of land recovery decisions or inclusion of land prices into the value of equitized enterprises are not close to actual market land prices under normal conditions, provincial-level People's Committees shall base themselves on the actual market prices of land use right transfer in their localities to decide on specific land prices as appropriate without having to observe the provisions of Clause 5, Article 1 of this Decree. 3. Before making decisions on any adjustment of land prices at some land positions, land regions and land categories in a year falling under their competence, provincial-level People's Committees shall prepare plans and submit them to the standing hoards of the People's roundl, of the same level for comment, and report their decisions to the People's Councils of the same level at the nearest session." Anicle 2.- Implementation provisions 1. This Decree takes effect 15 days after its publication in "CONG BAO." 2. To annul Clause 4, Article 30 of the Government's Decree No. 10912007/ND-CP of June 26, 2007, on transformation of enterprises with 100% state capital into joint-stock companies; to annul Clause 2 of Article 4, Clause 1 of Article 5, and Article 6 of Decree No. 17/ 2006/ND-CP ofJanuary 27, 2006, amending and supplementing a number of articles of tile Decree guiding the implementation of the Land Law and Decree No. 18712004/ND-CP on transformation of state companies into joint-stock companies. 3. Provincial-level People's Committee shall base themselves on Decree No. 188/2004/ND-CP and this Decree to promulgate and publicize specific prices of land of different categories for application from January 1 every year. 4. Ministers, heads ofministerial-level agencies, heads of government-attached agencies and presidents of provincial/municipal People's Committees shall implement this Decree. 5. The Ministry of Finance shall guide the implementation of this Decree. On behalfofthe Government Prime Minister NGUYEN TAN DUNG © VIETNAM LAW & LEGAL FORUM 82 OFFICIAL GAZETTE Issue nos Oa·07/AugyS12007 (C6ng Bao nos 554-5551August 12,2007) PRICE BRACKETS OF LAND OF DIFFERENT CATEGORIES (Issued together with the Government's Decree No. 12312007/ND-CP ofJuly 27, 2007) Table 1: ANNUAL CROP LAND PRICE BRACKET Unit of calculation' VND thousand/rn' Typeof Delta commune Midland commune Mountain commune commune 0' . - - - - - - - - - Pricelevel Minimum Maximum Minimum Maximum Minimum Maximum price price price price price price 4.00 135.00 3.00 105.00 1.00 71.00 Table 2: PERENNIAL TREE LAND PRICE BRACKET Unit of calculation' VND thousand/m' Typeof Deltacommune Midland commune Moumaln commune commune Price level Minimum Maximum Minimum Maximum Minimum Maximum price price price price price price 5.00 158.00 3.50 98.00 0.80 68.00 Table 3: PRODUCTION FOREST LAND PRICE BRACKET Unit of calculation' VND thousand/m' Type of Deltacommune Midland commune Mountain commune commune Pricelevel Minimum Maximum Minimum Maximum Minimum Maximum price price price price price price 1.50 60.00 0.80 38.00 0.50 30.00 © VIETNAM LAW & LEGAL FORUM Issue nos 06.07lAugust 20017 (C6ng Baa nos 554-555/August 12,2007) OFFICIAL GAZETTE 83 Table 4: AQUACULTURE LAND PRICE BRACKET Unit of calculation' VND thousand/m' Type of Delta commune Midland commune Mountain commune commune Price level Minimum Maximum Minimum Maximum Minimum Maximum price price price price price price 3.00 135.00 2.00 75.00 0.50 36.00 Table 5: SALT·MAKING LAND PRICE BRACKET Unit of calculation' VND thcusand/m' Price level Nationwide Minimum price Maximum price 1.50 62.00 Table 6: RURAL RESIDENTIAL LAND PRICE BRACKET Unit of calculation' VND thousand/rn' Type of Delta commune Midland commune Mountain commune commune Price level Minimum Maximum Minimum Maximum Minimum Maximum price price price price price price 10.00 1,875.00 4.50 1,275.00 2.50 900.0 © VIETNAM LAW & LEGAL FORUM Table 7: URBAN RESIDENTIAL LANDPRICEBRACKET Unit ofcakulation: VND thousand/m' Special grade Grade of urban center Price level S ::l ".s .g .S 0.. I ::s ::l "S .9 ";;< a ~ E S ::l c .S .~ .S 0. ::s I ::l " .~ "§. ~ S E ::l ".5.g c 0 ~ II ::l ".s .g K "" ~ a a § ~ :§ a ::s III ;:l "E .Sl .~ ~ ~ E ::l E "'S .~ ~ s IV ::l ".s .g K 0 ~ a a ::l "E .9 ~ ll. v § 13 .~ 's ::sa I I 1,500.0 67,500.0 400.0 42,500.0 150.0 30,000.0 120.0 19.500.0 50.0 13,350.0 30.0 6,700.0 Table 8: RURAL NON-AGRICULTVRAL PRODUCTIONIBUSINESS LAND PRICE BRACKET Unit of calculation: VND thousand/rrr' Tvoe of commune Delta conmune Midland commune Mountain commune Price level Minimum price Maximum price Minimum price Maximum price Minimum price Maximum price 10.00 1,350.00 4.50 900.0 2.50 525.00 o "T1 "T1 o s r ~ m ::j m Table 9: URBAN NON-AGRICULTURAL PRODUCTIONIBUSINESS LAND PRICE BRACKET Unit of calculation: VND thousand/nr' 1,000.0 I 47,810.0 I 250.0 I 29,500.0 I 100.0 I 20,000.0 Special grade '§ <5 ~ o ~ s:: f-mlen ~:t> <5 ~ I~ ~ ~ I'"C> C> ..:::!~ ::l "S .Sl '>( a ~a 4,500.0 v 15.0 a ::l "a .s 'S ~ ;§ ::l '".S .g '" 0 ~ S 8,500.0 IV ::l S "'a .~ ~s 40.0 ~ o.s .g ~ 0 ;:;: S 13,500.0 III 50.0 E ::l "E.Sl :g a ::s ::l ".s .g K 0 ~ S II § ".s .g C 0 ::§ ::l " E ."">< is.. ~ E 1 E ::l "Ei .~ '2 ~ ::§ ::l "a ".- '''; ~ 0. ::s a E ::l "S .Sl '2 a ~ Grade of urban center Price level