Circular No. 114/2004/TT-BTC guiding the implementation of Government Decree No. 188/2004/NĐ-CP dated November 16, 2004 on methods for determining land prices and land price ranges.

CIRCULAR

Guidelines for Implementing Decree No. 188/2004/NĐ-CP dated November 16, 2004 of the Government on Methods for Determining Land Prices and Price Ranges for Various Types of Land

Implementing Decree No. 188/2004/NĐ-CP dated November 16, 2004 of the Government on Methods for Determining Land Prices and Price Ranges for Various Types of Land; after reaching consensus with the Ministry of Natural Resources and Environment and the Ministry of Finance, methods for determining land prices shall be guided; valuation of various types of land by the People's Committee of provinces and centrally governed cities (hereinafter referred to as the provincial-level People's Committee) to decide and publicly announce specific land prices at localities as follows:

I. METHODS FOR DETERMINING LAND PRICES

1- Direct Comparison Method

1.1- Valuation of land using the direct comparison method must proceed through the following steps:

a- Step 1: Survey and collect information:

Identify the location of the plot of land or area being compared to determine the comparable plots of land or areas for information collection.

Select from three to five plots of land or areas that are similar in type of land, land area, infrastructure structure, legal basis located adjacent or nearby the plot of land or area being valued, and all have similar conditions, comparable to the plot of land or area being valued which have successfully transferred land use rights, or organized transactions on real estate trading floors, or successfully auctioned land use rights to collect necessary information.

Time period for collecting information:

The information to be collected must occur within the closest time frame to the survey date to compare and determine the price of the plot of land or area being valued.

In cases where information cannot be collected within the closest timeframe, information about land use right transfer transactions within one year prior to the valuation date may be collected. If there is no information about recent land use right transfer transactions or within one year for information collection, then collect information within three years prior to the valuation date.

Information to be collected:

Location, current characteristics of the plot of land (type of land, grade of land, position, type of urban area, type of street, area, shape, geographical features of the plot of land, assets on the land);

Environment (including natural environment including basic conditions such as scenery, water sources; air and water pollution levels; soil degradation levels, etc., and socio-economic environment including basic conditions such as good or poor infrastructure, convenient or inconvenient transportation, commerce, communication, healthcare, cultural education, social order and security, etc.);

Legal characteristics (land planning, land use right certificate, inheritance rights, gifted, leased, encroached land, etc.);

Transfer transaction date, successful auction date of land use rights;

Statistics of transfer prices, lease prices, auction prices of land use rights;

Transaction time, conditions, and payment terms.

Conditions of the information:

The above information must be collected from actual land use right transfer transactions on the market under normal conditions, i.e., voluntary transactions between buyers and sellers who each have full information and understanding of the type of land, plot of land, or area they are participating in the transaction. These purchase and sale transactions do not have speculative nature, are not pressured by time, forced to buy or sell, or involve parties with familial relationships, lack legal documentation, and other subjective reasons affecting the normal formation and movement of land use right transfer prices on the market.

b- Step 2: Compare and analyze information:

Based on the information surveyed and collected in Step 1, conduct analysis and comparison to select common and different criteria among the plots of land or areas being compared with the plot of land or area being valued. On this basis, determine the common and different price criteria to calculate and determine the price for the plot of land or area being valued.

c- Step 3: Adjust the price differences between the plots of land or areas being compared with the plot of land or area being valued to determine the price for the plot of land being valued.

The estimated value of the plot of land or area being valued is calculated by adjusting the price differences with each plot of land or area being compared as follows:

In which, the amount of adjustment of the price between each plot of land or area being compared and the plot of land or area being valued is the adjustment quantity of price differences arising from differences in the location of the plot of land, infrastructure structure, characteristics of the type of land, environmental pollution levels, etc.. The price difference between the plot of land being compared and the plot of land being valued (which can be calculated in absolute value or as a percentage of the transfer price of land use rights) is determined based on the assessment of experts and land valuation agencies.

In cases where the land price fluctuates during the period from the successful transfer date of land use rights of the plot of land being compared to the valuation date of the plot of land being valued, the price of the plot of land being compared must be adjusted to the actual market transfer price of land use rights, then continue to adjust the price of the plot of land being compared according to the formula stated above.

d- Step 4: Determine the price of the plot of land being valued by taking the average of the prices of three to five plots of land or areas being compared after adjusting the price differences in Step 3.

For example, applying the direct comparison method to determine land prices (for simplicity and ease of understanding, this example only presents the comparison method to determine the price of the plot of land or area being valued with one plot of land or area being compared).

It is assumed that during the valuation process of a residential land plot with an area of 20,000 square meters located in a fifth-tier city (referred to as Plot B), the valuation agency has collected information about an adjacent plot with an area of 25,000 square meters that can be compared to the plot being valued, which was successfully auctioned for investment in housing construction (referred to as Plot A) within the nearest time frame to the valuation date of Plot B. The total amount received from the auction of Plot A was 125 billion VND, equivalent to a unit price of 5 million VND per square meter (5 million VND/m²).²).

With all the collected information, the valuation agency proceeds to compare Plot A and Plot B as follows:

From the comparison, the valuation agency concludes that the two plots share seven criteria and differ in four criteria. To determine the differences between comparative factors to adjust the price, the valuation agency applies the expert method combined with statistical methods to calculate the difference factor coefficient among the criteria.

Scoring can be applied according to a scale with the highest score of 10 points for the best conditions (for example, when assessing location, if the land has the best location it gets 10 points; or when assessing the type of street, if the land is on a street with the highest potential for profit and the most favorable infrastructure it gets 10 points). Lower scores apply to similar criteria with worse conditions. Based on specific circumstances, local authorities establish a scoring system for specific valuations:

Each point less reduces the price by 5%, while each point more increases the price of the comparable plot (A) by 5%. With this convention, based on the successful auction price of Plot A at 125 billion VND:

For comparing and valuing Plot B, the price of Plot B will be reduced: - Frontage width: B is worse than A by 2 points, reducing by 10% = 12.5 billion VND

- Depth of the plot: B is worse than A by 1 point, reducing by 5% = 6.25 billion VND

- Traffic: B is worse than A by 1.5 points, reducing by 7.5% = 9.375 billion VND

Total reduction in price due to differences where B is worse than A

28.125 billion VND: B will be increased:

- Dust: B is better than A by 1 point, increasing by 5% = 6.25 billion VND

Total increase in price due to differences where B is better than A

6.25 billion VND: The adjusted price of Plot A (denoted as A') according to the differences of Plot B is calculated as follows:

A' = 125 - 28.125 + 6.25 = 103.125 (billion VND)

The unit price per square meter is:

103.125 million VND : 25,000 m²

= 4.125 million VND/m²² Similarly, assuming the valuation agency selects two additional plots C and D for comparison with Plot B. The analysis and comparison results have determined the adjusted unit price of Plot C according to the factors of Plot B is 4.5 million VND/m²².

and of Plot D is 4.05 million VND/m²² The unit price of Plot B is determined by taking the average of the three adjusted prices above:².

(4.125 + 4.5 + 4.05) : 3 = 4.225 (million VND/m²)

Thus, the estimated unit price of residential land in Plot B in a fifth-tier city is approximately 4.2 million VND/m²²)

This price serves as the basis for developing a specific land price plan to be submitted to the Provincial People's Committee for decision.²1.2- Deduction of asset value on land

In cases where the transfer price of land use rights includes the value of assets on the land (structures, houses, buildings, perennial crops such as rubber, coffee, tea, pepper, cashew, etc., or fruit trees), when calculating the land price, the remaining value of structures, houses, buildings, and perennial crops planted on the land must be deducted according to the following formula:

Price of land at the valuation date

Where:

For structures, buildings, or perennial crops not included in the current state regulations on depreciation, the Department of Finance shall coordinate with relevant departments to provide guidance on appropriate depreciation calculation methods based on depreciation principles.

In cases where structures, houses, buildings, or perennial crops on a plot have exceeded their depreciation period but are still in use, their value is calculated based on re-evaluated asset values.

For perennial crops currently in the basic construction phase, no depreciation is calculated. The original cost of perennial crops in the basic construction phase is the cumulative investment value up to the valuation date or assessed based on actual value.

2- Income approach

2.1- Valuation of land using the income approach involves the following steps:

: Calculate the annual income generated by the plot of land to be valued.

a- Step 1For land used for leasing or land with structures (houses) built for leasing, the total income of the plot to be valued is the rental income from the land or the rental income from the land and structures on the land annually.

For agricultural land, the total income of the plot to be valued is the total revenue from agricultural activities on the plot annually.

For agricultural land, the total income of the plot to be appraised is the total revenue from agricultural activities on that plot annually obtained from the land.

b- Step 2: Calculate the total expenses incurred to form the total income and the amounts required to be paid according to the law.

Total expenses include specific items such as taxes, investment improvement costs, production costs. These expenses are calculated in accordance with current state regulations; for expenses not regulated by the state, they are calculated based on actual market prices prevailing in the locality where the production and business entity has incurred them (as stipulated in contracts, purchase-sale invoices issued by authorized financial agencies).

c- Step 3: Determine the annual net income using the following formula:

d- Step 4: Estimate the land value to be appraised using the following formula:

When appraising land using the income approach, the total income, expenses determined at Steps 1 and 2, and the net income determined at Step 3 must be the average total income, total expenses, and net income of the land category or location of the land to be appraised, consistent with the approved land use purpose. At the same time, calculate the average for each year over the three years immediately preceding the valuation date.

In cases where data for the three years cannot be collected, use the data from the year immediately preceding the valuation date.

For example, applying the income method to determine the price of paddy field land (annual crop land) Category IV in Village A (a flatland village) of County C, Province X in the Mekong Delta region, which produces three rice crops per year, based on the following assumed data:

Remarks: (* ) It is assumed that this is the average savings account interest rate for a 12-month term deposit at the Branch of the State Bank of Vietnam Agricultural Development Bank, which is the state-owned commercial bank with the highest savings account interest rate among state-owned commercial banks in the locality.

+ The total income for three years is 119,900,000 VND/hectare.

+ The total production cost for three years is 54,250,000 VND/hectare.

+ The average annual net income is:

= 21,883,333 (VND/hectare)

+ The average savings account interest rate for a 12-month term deposit at state-owned commercial banks is 7% per annum.

+ The value of one hectare (10,000 square meters) of paddy field land calculated using the formula stated in Step 4, Section 2, Part I of this Circular will be:²Value of one hectare of paddy field land

2.2- Deducting the value of assets on the land²For land that already has construction projects, houses, structures, or perennial crops such as rubber, coffee, tea, pepper, cashew, etc., or fruit trees, when calculating the land price, the remaining value of these constructions, houses, structures, and planted crops must be deducted using the method of deducting the value of assets on the land as guided in Point 1.2, Section 1, Part I of this Circular.

3. Conditions for Applying Land Valuation Methods

3.1. When conducting land valuation, the direct comparison method shall only be applied when sufficient statistical information on comparable land types can be collected, as directed in Point 1.1, Section 1, Part I of this Circular; the income method shall only be applied to appraise land types when the income generated from the land can be determined, if full data on the transfer prices of similar land types on the market cannot be obtained.

3.2. When there is a type of land for which both the common market transfer prices and the income generated from the land can be calculated, the direct comparison method should be primarily used for land valuation.

3.3. In the following situations, both methods of determining land prices specified in this Circular must be used to check, compare, and verify the estimated prices to decide on the specific price:

The transfer of land use rights does not occur frequently on the market, and the collected data lacks systematicity;

Market transfer prices for land use rights fluctuate unpredictably and do not accurately reflect the supply-demand relationship for land under normal conditions.

The estimated land price obtained by applying either of the two methods of determining land prices exceeds the maximum price limit set by the Government in Clause 1, Article 6 of Decree No. 188/2004/NĐ-CP dated November 16, 2004, regarding the method of determining land prices and the price range for various types of land.

3.4- The above methods of determining land prices are used to determine the value of specific plots of land as a basis for valuing land in bulk for each land category or location according to the guidance provided in Part II of this Circular.

II. SPECIFIC LAND VALUATION AT LOCAL LEVELS

1- Some preparatory work to conduct land valuation

a- Classify villages into flatland, midland, and mountainous villages to apply the framework of land prices in rural areas prescribed by the Government for different regions: plains, midlands, mountains, to each type of village in the locality (province, city) appropriately.

b- Conduct land classification to appraise land for various types of land: annual crop land, perennial crop land, aquaculture land, production forest land, protective forest land, special-use forest land, and other agricultural land as prescribed by the Government.

Land classification is carried out in accordance with the current provisions of the Law on Land Tax and the implementing regulations of the Law on Land Tax.

If provinces have already classified land and the categories are currently being used to calculate land tax, then use those classification results for land valuation and only change them upon approval by the competent authority as prescribed by the state.

In cases where provinces have classified land grades which are currently being used to calculate agricultural land use tax, the results of such land classification shall be used for land valuation and shall only be changed upon approval by the competent authority in accordance with state regulations.

c- Specify specific criteria for land location in sequence from number 1 onwards to the final number suitable for local conditions and determine the quantity of land locations for salt production and non-agricultural land locations in rural areas to assess land value according to general criteria stipulated in Article 9 of Decree No. 188/2004/NĐ-CP dated November 16, 2004 of the Government on methods for determining land prices and price ranges for various types of land, specifically as follows:

For salt-producing land: Based on specific local conditions, the provincial People's Committee categorizes land locations based on criteria such as distance from the salt field to the centralized salt storage area within the production zone or distance from the salt field to inter-district roads (in cases where there are no inter-district roads passing through, the distance to inter-commune roads will be considered).

For residential land and non-agricultural production and business land in rural areas: Based on specific local conditions, the provincial People's Committee identifies areas requiring land valuation; categorizes land locations and determines the quantity of land locations for each valuation area.

d- Specify specific criteria for land location to classify land locations and determine the quantity of land locations within each street type; classify streets and determine the quantity of streets in sequence from number 1 onwards to the final number suitable for local conditions within each urban area to assess land value according to general criteria stipulated in Article 10 of Decree No. 188/2004/NĐ-CP dated November 16, 2004 of the Government on methods for determining land prices and price ranges for various types of land.

Based on specific local conditions, the provincial People's Committee may not classify streets but may instead categorize land locations and specify the quantity of land locations for each section of streets or specific street names to conduct land valuation. The classification of land locations, division of sections of streets, and streets of each urban area for valuation must also be carried out according to the general criteria stipulated in Article 10 of Decree No. 188/2004/NĐ-CP dated November 16, 2004 of the Government on methods for determining land prices and price ranges for various types of land.

e- The provincial People's Committee bases its decision on the establishment of urban areas and the classification of urban areas approved by competent authorities for urban areas within the province to apply the land price range for various types of land in urban areas prescribed by the Government in accordance with the types of urban areas in the locality.

2- Determining and adjusting specific land prices

a- Land prices must be determined in accordance with the land use purpose recorded in the land use right certificate issued in accordance with the law; decisions on land allocation, land lease, permission to change land use purposes by competent state agencies, and registration of changes in land use purposes consistent with approved land use plans and land use plans.

For land that has not been issued a land use right certificate, does not have a plan or has a land use plan but has not yet been implemented, and has not registered land use rights, the land price shall be determined according to the current land use purpose.

In cases where the land user uses the entire or part of the land plot for purposes other than those recognized by law or approved by competent authorities; uses agricultural or forestry land for intercropping, combined with organizing ecotourism, and uses non-agricultural land for combined purposes, when assessing land value, it still follows the land use purpose specified in the land use right certificate, land allocation decisions, land lease decisions by the State, land use plans, and land use registration mentioned above.

b- Specific price levels for each category of land and land location of various types of land are stipulated by the provincial People's Committee in Vietnamese Dong per unit area of land (m²) and must not exceed the price range for various types of land by region or urban area prescribed by the Government in Clause 1, Article 6 and the permissible application limits for localities prescribed in Clause 2, Article 6 of Decree No. 188/2004/NĐ-CP dated November 16, 2004 of the Government on methods for determining land prices and price ranges for various types of land.

In cases where the actual market transfer price of land use rights for certain types of land and land locations in the locality under normal conditions fluctuates (locally) increasing or decreasing compared to the land price stipulated by the provincial People's Committee, the provincial People's Committee adjusts the price of those types of land and land locations with fluctuations according to Clause 1, Article 15 of Decree No. 188/2004/NĐ-CP dated November 16, 2004 of the Government on methods for determining land prices and price ranges for various types of land.

c- Specific valuation for each category of land and land location of land types for which the Government has prescribed a price range:

For annual crop land, perennial crop land, aquaculture land, timber production forest land, valuation is conducted for each category of land divided into three regions as determined according to the guidance at Point a and Point b, Section 1, Part II of this Circular.

If the same type of agricultural land mentioned above is used to raise or grow different types of crops or animals, only one unified land price level is set for each category of land based on the main crop or animal raised in the region (for example, rice land in annual crop land regions); the land price of the same category of the same type of agricultural land in the same region is not differentiated according to different crops or animals.

Based on specific local conditions, the valuation for each category of land may use one of the following two methods:

First method: Direct valuation for each category of land

Within each category of land divided into three regions within the administrative boundaries, select a minimum of three (03) representative plots of land. Then, determine the price of each plot of land using the land price determination methods as guided in Part I of this Circular and calculate the price per unit area (m²) of each plot of land.

The land category price (per square meter) is determined as the average price level of the selected plots of land.

Second methodThe land of Class 1 shall be appraised first, then the land classification appraisal coefficient for Class 1 shall be used to appraise the remaining land classes.

The method of appraising land of Class 1 shall be carried out as directed in the direct appraisal method for each land class mentioned above.

Based on the standards of factors for each land class subject to tax or transfer price of land use rights of each land class, the Provincial People's Committee shall establish the land classification appraisal coefficient to appraise land according to the principle that land of Class 1 has the highest price corresponding to a coefficient of 1, while subsequent land classes have lower coefficients corresponding to lower prices.

The land classification appraisal coefficient is the ratio of the transfer price of land use rights of each land class compared to the transfer price of land use rights of Class 1, or the ratio of the standards of factors for each land class subject to tax compared to Class 1.

The land price of various types of land classified as mentioned above shall be calculated by multiplying the determined land price of the classified land (Class 1) with the land appraisal coefficient of each land class.

Example: Assuming the land price for annual crop cultivation land of Class 1 in commune A, district X, province H, according to the land price framework for annual crop cultivation land prescribed by the Government is 80,000 VND/m².²The land classification appraisal coefficients from Class 1 to Class 6 in sequence are: 1; 0.85; 0.67; 0.50; 0.32; 0.1, then the land prices of subsequent land classes after Class 1 are specifically calculated as follows:

For salt-making land, the appraisal shall be based on the location of the land. Based on the criteria for ranking land locations, the Provincial People's Committee shall establish the land location appraisal coefficient according to the principle that land at Location 1 has the highest price corresponding to a coefficient of 1, while subsequent locations have lower coefficients corresponding to lower prices. The method of determining the land price for each location is similar to the method of determining the price for each land class as directed above.

For residential land and non-agricultural production and business land in rural areas, the appraisal shall be based on the location of land in three areas within the locality. Based on the criteria for ranking land locations, the Provincial People's Committee shall establish the land location appraisal coefficient for each area according to the principle that land at Location 1 of any area has the highest price in that area corresponding to a coefficient of 1, while subsequent locations in the corresponding areas have lower coefficients corresponding to lower prices. The method of determining the land price for each location is similar to the method of determining the price for residential land and non-agricultural production and business land in urban areas.

Specifically, for certain residential land locations in rural areas adjacent to main traffic routes (provincial roads, national highways) or adjacent to industrial zones, commercial areas, and tourist areas, which are particularly advantageous for business and service activities and have actual transfer prices of land use rights on the market higher than average, the land price shall be set higher but not more than three times the maximum price of the residential land price framework prescribed in Clause 1, Article 6 of Decree No. 188/2004/NĐ-CP dated November 16, 2004 of the Government on methods for determining land prices and price frameworks for various types of land.

The Provincial People's Committee shall specify specific criteria and the number of locations for this type of land for appraisal purposes.

For residential land and non-agricultural production and business land in urban areas, the appraisal shall be based on the location of land for each type of street in different types of cities.

Based on specific conditions in the locality, the appraisal for each land location may use one of the following two methods:

Direct appraisal for each land location:

First methodIn each land location of each type of street or specific section of the street, select a minimum of three (03) plots of land at different representative locations. Then, determine the price of each plot of land using the methods for determining land prices as directed in Part I of this Circular and calculate the price per unit area (m²).

The land price of each location (per square meter) is determined as the average price of the selected plots of land.²) of each plot of land.

Appraise the land of Location 1 of each area, each type of street, or each street, then use the land location coefficient to appraise the remaining land locations of each area, each type of street, or each street.

Second methodThe method of determining the price of Location 1 is carried out as directed in the direct appraisal method for each land location mentioned above.

Based on the criteria for ranking land locations, the Provincial People's Committee shall establish the land location appraisal coefficient for each type of street in different types of cities according to the principle that land at Location 1 of any street has the highest price of that street corresponding to a coefficient of 1, while subsequent locations of each type of street have lower coefficients corresponding to lower prices.

The land location appraisal coefficient for all types of land mentioned above is the ratio of the actual transfer price of land use rights on the market of each land location compared to Location 1, or the ratio of the criteria of each land location.

The land price of all types of land appraised according to location as mentioned above shall be calculated by multiplying the determined land price of the land location (Location 1) with the land location appraisal coefficient of each type of land.

Example: Assuming the land price for residential land, Location 1 of Type 1 street in a special city, according to the price framework prescribed by the Government is 67,000,000 VND/m².

The land location appraisal coefficients from Location 1 to Location 4 of Type 1 street in sequence are: 1; 0.8; 0.65; 0.4, then the land prices of subsequent locations after Location 1 are as follows:²Land Location

For residential land and non-agricultural production and business land in towns, townships, and new urban areas that have not been classified as cities located within rural land areas (outside the boundaries of urban land such as cities and towns already classified as cities), when determining specific land prices, the price range for residential land and non-agricultural production and business land in a fifth-class city as stipulated in Clause 1 and the permissible limits for applying the provisions in Clause 2 of Article 6 of Decree No. 188/2004/NĐ-CP dated November 16, 2004, of the Government on methods for determining land prices and price ranges for various types of land shall be applied.

d- Determining specific prices for types of land for which the Government has not prescribed a price range:

For protective forest land and special-use forest land: The specific price level established by the provincial People's Committee for production forest land shall serve as the basis for pricing protective forest land and special-use forest land. The valuation process for protective forest land and special-use forest land shall follow the valuation process for production forest land as outlined in Point c, Section 2, Part II of this Circular.

The specific price level for each category of protective forest land and special-use forest land shall not exceed the specific price level for each category of production forest land.

For other agricultural land as provided in Subparagraph d, Section 4, Article 6 of Decree No. 181/2004/NĐ-CP dated October 26, 2004, of the Government on implementing the Land Law:

The prices for other types of agricultural land shall be determined based on the specific land price levels set by the provincial People's Committee for adjacent or nearby agricultural land within the same region (if there is no adjacent land).

The specific price level set for each type of other agricultural land shall not exceed the specific price level set for adjacent agricultural land, or the highest specific price level set for agricultural land in nearby areas.

For land used to construct administrative offices and public works:

The specific price level established by the provincial People's Committee for residential land shall serve as the basis for pricing land used to construct administrative offices and public works according to the principle: Land used to construct administrative offices and public works in rural areas shall be based on the price of residential land in rural areas; land used to construct administrative offices and public works in urban areas shall be based on the price of residential land in urban areas.

The specific price level set for each location of land used to construct administrative offices and public works shall not exceed the specific price level set by the People's Committee for similar locations of adjacent residential land or the nearest residential land in nearby areas if there is no adjacent land.

For land used for national defense and security purposes; land used for public purposes as prescribed by the Government; land used by religious institutions; land with structures such as communal houses, temples, shrines, hermitages, ancestral halls, family temples; land used for cemeteries and graveyards; and other non-agricultural land as prescribed by the Government (as provided in Subparagraph e, Section 5, Article 6 of Decree No. 181/2004/NĐ-CP dated October 29, 2004, of the Government on implementing the Land Law):

The specific price level established by the provincial People's Committee for adjacent land prices shall serve as the basis for pricing the aforementioned types of land.

If the aforementioned types of land are only adjacent to residential land, then the price of residential land or only adjacent to non-agricultural production and business land, then the price of non-agricultural production and business land shall be used; if there is no such adjacent land, then the price of non-agricultural production and business land in the nearest area shall be used for pricing.

If the aforementioned types of land are adjacent to multiple types of land, then the price of the type of land with the highest price shall be used as the basis.

The specific price level set for each location of the aforementioned types of land shall not exceed the specific price level set by the provincial People's Committee for similar locations of adjacent residential land or non-agricultural production and business land.

3- Valuing land in border areas:

a- Land prices in border areas between provinces and centrally-administered municipalities:

When valuing land in border areas between provinces and centrally-administered municipalities, the People's Committees of the provinces with border land must base their actions on the provisions in Clause 1 of Article 12 and Clause 1 of Article 14 of Decree No. 188/2004/NĐ-CP dated November 16, 2004, of the Government on methods for determining land prices and price ranges for various types of land, and the guidance for determining land prices in this Circular.

Before deciding on land prices in border areas as stipulated in Clause 1 of Article 12 of Decree No. 188/2004/NĐ-CP dated November 16, 2004, of the Government on methods for determining land prices and price ranges for various types of land, the provincial People's Committee must consult and exchange views with each other regarding the proposed price levels and must adhere strictly to the principles set out in Subparagraph c, Section 1, Article 56 of the 2003 Land Law: "Land in border areas between provinces and centrally-administered municipalities with the same natural conditions, infrastructure structure, current usage purpose, and planned usage purpose shall have the same price level."

In cases where land in border areas between provinces and centrally-administered municipalities have the same current usage purpose, planned usage purpose, natural conditions, and infrastructure structure but different economic development policies, social policies, and investment attraction policies, the price levels in border areas may differ but shall not exceed 20%.

In cases where localities cannot agree on the price levels in border areas, they shall report to the Prime Minister for decision.

b- Land prices in border areas between districts, counties, towns, and cities under provinces and centrally-administered municipalities.

Based on the actual situation in the locality, the provincial People's Committee shall establish land prices in border areas in accordance with the principle: The distance of border land defined by the province, if having the same natural conditions, infrastructure structure, current usage purpose, and planned usage purpose, shall have the same price level.

In cases where the infrastructure conditions in border areas are not the same, the land prices in border areas shall be determined based on the actual conditions of each area.

For residential land in rural areas adjacent to urban areas (including communes bordering the inner city of special-class cities and class I cities, and villages bordering the inner city, district towns of other cities), the land price in this area shall be determined according to the principle of valuing contiguous plots and applying the land price framework prescribed by the Government for the adjacent urban areas.

The People's Committee of the province shall specify regulations concerning residential land in rural areas adjacent to urban areas.

III. IMPLEMENTATION

1- Based on the Land Law No. 13/2003/QH11; Decree No. 188/2004/NĐ-CP dated November 16, 2004 of the Government on methods for determining land prices and frameworks for various types of land, and the guidance provided in this Circular, the People's Committee of the province shall decide specific land prices; publicly announce them and monitor the implementation of the land price lists at the local level.

2- Annually, the People's Committee of the province shall allocate a budget from the local government funds to conduct investigations, surveys, and statistics on land transfer prices, hire consultants for land valuation, and value various types of land; organize training sessions to implement decisions on land prices; and provide vocational training and enhancement for local land price management officials. Management of these funds shall be carried out in accordance with current state regulations.

The People's Committee of the province shall direct the Department of Finance to establish a network for monitoring and statistically recording actual land transfer prices in the local market. Regularly report to the Ministry of Finance as required. In cases where actual land transfer prices in the local market fluctuate continuously and significantly, causing large price discrepancies, reports must be made to the Ministry of Finance for consolidation and submission to the Government for consideration to adjust the land price framework.

3- This Circular shall take effect fifteen days after its publication in the Official Gazette.

This Circular replaces Circular No. 94/TT-LB dated November 14, 1994 of the Inter-Ministerial Committee on Prices of the Government, Ministry of Finance, Ministry of Construction, and General Department of Land Administration guiding the implementation of Decree No. 87/CP dated August 17, 1994 of the Government prescribing the framework for various types of land prices.

During the implementation of this Circular, if any difficulties arise, the People's Committees of the provinces and centrally-administered municipalities are requested to report to the Ministry of Finance for guidance on resolution.