Joint Circular No. 1/TTLB guiding the valuation for renting residential properties

JOINT CIRCULAR

Guidelines for Determining Rental Prices for Housing 

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Pursuant to Decision No. 118-TTg dated November 27, 1992 of the Prime Minister on rental housing prices and incorporating housing fees into salaries;
Pursuant to Decision No. 137-HĐBT dated April 27, 1992 of the Council of Ministers on price management;
After reaching consensus with the State Planning Commission, the General Confederation of Labor of Vietnam, and the Government Price Board, the Ministry of Construction and the Ministry of Finance hereby issue guidelines for determining rental prices for housing as follows:

2. Individuals who have registered as the principal investigator of a Research Project or Pilot Production Project and those participating in its implementation shall not participate in the Evaluation and Selection Council for that Research Project or Pilot Production Project (hereinafter referred to as the Council). In necessary cases, members of the Council may be staff members of the organization registering as the principal investigator of the Research Project or Pilot Production Project, but not more than one person and they cannot serve as Chairperson, Vice-Chairperson, or reviewing member.

1. The rental price for housing determined under this Circular serves as the basis for calculating housing fees for state-owned housing currently managed by land management agencies, administrative and public service agencies, armed forces, Party and mass organizations at central and local levels, and production and business units that have rented or allocated to cadres, civil servants, and employees before November 1, 1992 (hereinafter referred to as the rental price for housing).

The rental price for housing specified in this Circular serves as the basis for determining the obligations of organizations managing and operating state-owned housing development.

This price also applies to private housing that was rented out according to state-directed values before November 1, 1992.

The rental price for housing only applies to tenants using the housing for residential purposes. Housing used for other purposes (production, business, services, etc.) does not fall within the scope of this Circular.

2. Based on the standard prices, coefficients, and calculation methods stipulated in Section II of this Circular, the People's Committees of provinces and centrally-administered cities (hereinafter collectively referred to as provinces) shall determine and announce the application of rental housing prices for each type of house within their territorial jurisdiction (regardless of the level of management and the direct managing agency of the housing).

3. The standard prices for eight types of houses (categories I, II, III, IV of villas) and the coefficients prescribed in Section II of this Circular shall be uniformly applied throughout the country and adjusted only upon a decision by the State.

4. The rental prices for housing determined in this Circular apply to houses that meet the necessary safety standards as prescribed by the State. For houses that do not meet the standards, the housing management authority must develop plans and measures to repair them or agree with the tenant to undertake repairs according to approved budgets, which will then be deducted from monthly rent payments.

5. The criteria for classifying houses (for villas) and grading houses (for other types of housing) to determine rental prices are based on the provisions in Appendix 1 attached to this Circular.

II. DETERMINING RENTAL HOUSING PRICES

1. The standard prices for eight types of houses (villas and grades of ordinary housing) are set forth in Table 1 below:

Table 1: Standard prices uniformly prescribed for each type of housing.

Unit: VND/sq m used - month

The category of villa and grade of ordinary housing are determined according to Appendix 1 attached to this Circular.

The usable area (sq m) for calculating rent based on the prices in Table 1 includes the following areas:

- Area of living rooms or parts used for living purposes ... sq m

- Area of auxiliary rooms or parts (kitchen, toilet, bathroom, laundry, washing...) ... sq m

2. Coefficients for adjusting standard prices are applied to determine the rental housing prices:

a) The specific rental housing prices in each province are determined based on the standard prices set forth in Table 1, along with four groups of coefficients as follows:

- Urban level coefficient (K1)

- Location coefficient within urban areas (K2)

- Floor height coefficient (K3)

- Transportation condition coefficient (K4).

The values of K1, K2, K3, K4 are uniformly prescribed in Tables 2, 3, 4, and 5 of this Circular.

Table 2: Urban level coefficient (K1)

Note: The urban level (I, II, III, IV, V) is based on Decision No. 132-HĐBT dated May 5, 1990 and the classification table attached to this Circular (Appendix 2).

Table 3: Location coefficient within urban areas (K2)

Table 4: Floor height coefficient (K3)

Note: In places where the term ground floor is used, the ground floor is equivalent to the first floor as defined in this Circular.

Table 5: Transportation condition coefficient (K4)

b) Principles for applying coefficients: Each type of villa and each level of housing shall apply a maximum of not more than four coefficients specified above; the plus sign (+) increases, the minus sign (-) decreases.

3. Rent price for 1 square meter of usable area of housing:

a) For villas of various types:

b) For houses of levels I, II, III, IV:

4. Monthly rent payable:

Specific calculation of monthly rent is detailed in the examples in Appendix No. 3 attached to this Circular.

III. IMPLEMENTATION

1. The Chairman of the Provincial People's Committee organizes the demarcation of urban areas, investigates and determines the types of houses and sets rental prices for housing in accordance with the guidelines of this Circular to be uniformly applied within the territorial scope of the province and reports to the relevant ministries.

2. The Department of Land or Construction Department (where there is no Department of Land) bases on this Circular and actual survey data of the locality, coordinates with the Finance-Price Department and the Trade Union of the province to develop pricing plans for renting houses in each district of the province, submit them to the Chairman of the Provincial People's Committee for approval and public announcement before implementation, and simultaneously report to the relevant ministries.

3. Organizations managing or operating housing in localities, central sectors, social organizations, and private entities that have houses for rent before November 1, 1992, base on the rental prices for housing announced by the Chairman of the Provincial People's Committee, proceed to re-sign or sign new rental housing contracts with all tenants to implement payment and fulfill obligations to the State from November 1, 1992.

4. During the process of implementing this Circular, if there are difficulties or obstacles, they are requested to promptly reflect to the Ministry of Construction so that the Ministry can coordinate with the Ministry of Finance to provide guidance and resolution.