Decree No. 123/2007/ND-CP amends and supplements certain articles of Decree No. 188/2004/ND-CP dated November 16, 2004 on methods for determining land prices and price ranges for various types of land.

DECREE

Amending and supplementing some articles of Decree No. 188/2004/NĐ-CP

dated November 16, 2004 on methods for determining land prices

and price ranges for various types of land

THE GOVERNMENT

Based on the Law on the Organization of the Government dated December 25, 2001;

Pursuant to the Land Law dated November 26, 2003;

Pursuant to the Price Law dated April 26, 2002;

Considering the proposal of the Minister of Finance,

DECREE:

Article 1. Amending and supplementing some articles 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 (hereinafter referred to as Decree No. 188/2004/NĐ-CP) as follows:

1. Amend Point d Clause 1 Article 2 as follows:

"d) Calculate the value of land use rights for stamp duty collection according to the provisions of the law."

"Article 6. Services and activities carried out within the Cam Ranh International Port area

"2. The actual market transfer price of land use rights at a specific time under normal conditions is the amount of Vietnamese currency calculated per unit area of land based on each lawful purpose of use, formed from the results of completed transactions, reflecting a general trend between the seller and buyer under normal commercial conditions, not influenced by unreasonable factors causing sudden increases or decreases in price such as speculation, natural disasters, enemy attacks, economic and financial crises, changes in planning, forced transfers, kinship relations, special benefits, and other cases specified by the Ministry of Finance."

3. Supplement Clause 3 and Clause 4 into Article 4 as follows:

"3. Deduction method: a method for determining the land price of a plot with attached assets by excluding the value of the attached assets from the total value of real estate (including the value of the land and the value of the attached assets)."

"4. Residual method: a method for determining the land price of an empty plot with potential for development according to planning or permitted change of use to achieve optimal use by excluding the estimated cost to create development from the assumed development value of the real estate."

4. Amending and supplementing Article 5 as follows:

a) Supplement Clauses 3 and 4 after Clause 2 as follows:

"3. The deduction method is applied to determine the land price of a plot with attached assets when there is insufficient data on the market price of similar vacant plots to apply the direct comparison method, while it is possible to collect data on the market price of similar plots with attached assets compared to the plot whose price needs to be determined.

4. The residual method is applied to determine the land price of vacant plots with potential for development due to changes in planning or change of use when there is no similar market transfer price of land use rights to apply the direct comparison method."

b) Clause 3 is amended to become Clause 5 as follows:

"5. Based on the specific situation of the market and collected data, the People's Committee of the province selects an appropriate method among the methods for determining land prices stipulated in Decree No. 188/2004/NĐ-CP and this Decree to set land prices locally. In necessary cases, a combination of several methods for determining land prices may be used to set specific land prices."

c) Abolish Clause 4.

5. Amend Article 6 as follows:

Article 6. Price Ranges for Various Types of Land

1. The price range for land issued together with this Decree applies to various types of land classified according to Article 6 of Decree No. 181/2004/NĐ-CP dated October 29, 2004 of the Government on implementing the Land Law (hereinafter referred to as Decree No. 181/2004/NĐ-CP), including:

a) For agricultural land:

- Price range for annual crop land (Table 1);

- Price range for perennial crop land (Table 2);

- Price range for production forest land (Table 3);

- Price range for aquaculture land (Table 4);

- Price range for salt-making land (Table 5);

- For protective forest land and special-use forest land, the provincial People's Committee bases on the decided production forest land price and the valuation method for production forest land stipulated in Clause 10, Article 1 of this Decree to specify the specific price;

- For other types of agricultural land as stipulated in Point d, Clause 4, Article 6 of Decree No. 181/2004/NĐ-CP, the provincial People's Committee bases on the decided adjacent agricultural land price and the valuation method for adjacent agricultural land stipulated in Clause 10, Article 1 of this Decree to specify the specific price.

b) For non-agricultural land:

- Price range for rural residential land (Table 6);

- Price range for urban residential land (Table 7);

- Price range for non-agricultural production and business land in rural areas (Table 8);

- Price range for non-agricultural production and business land in urban areas (Table 9);

- For land for construction of agency headquarters and public works; land for national defense and security purposes; religious and belief land (including land used by religious organizations, land with structures such as temples, shrines, altars, hermitages, ancestral halls, churches); other non-agricultural land (including land for private construction projects not for business purposes and not attached to residential land; land for worker dormitories; urban land used for construction of buildings serving agriculture, including indirect agricultural activities; land for animal husbandry construction allowed by law; land for construction of agricultural, forestry, and aquaculture research stations; land for household and individual storage facilities for agricultural products, plant protection chemicals, fertilizers, agricultural machinery and tools), the provincial People's Committee bases on the decided adjacent residential land price or the nearest residential land price in the vicinity (if there is no adjacent land) and the provisions of Clause 10, Article 1 of this Decree to specify the specific price;

- For land used for public purposes as stipulated in Point b, Clause 5, Article 6 of Decree No. 181/2004/NĐ-CP and other non-agricultural land (including land for private construction projects not for business purposes and not attached to residential land; land for worker dormitories; urban land used for construction of buildings serving agriculture, including indirect agricultural activities; land for animal husbandry construction allowed by law; land for construction of agricultural, forestry, and aquaculture research stations; land for household and individual storage facilities for agricultural products, plant protection chemicals, fertilizers, agricultural machinery and tools), the provincial People's Committee bases on the decided adjacent non-agricultural production and business land price or the nearest non-agricultural production and business land price in the vicinity (if there is no adjacent land) and the provisions of Clause 10, Article 1 of this Decree to specify the specific price;

- For land used as cemeteries, the Provincial People's Committee shall determine specific prices based on the price of adjacent land types that have been decided and in accordance with Clause 10, Article 1 of this Decree.

- For river, stream, canal, creek, and brook land, and surface water specifically used for aquaculture purposes, the framework price for aquaculture land shall be applied; if used for non-agricultural purposes or combined with aquaculture activities, the Provincial People's Committee shall determine specific prices based on the price of adjacent non-agricultural land or the nearest non-agricultural land price (in cases where there is no adjacent land) that has been decided and in accordance with Clause 10, Article 1 of this Decree.

c) For unused land groups

For land types whose usage purpose has not yet been determined (including unused flat land, unused mountainous land, and bare rock mountains without trees), when it is necessary to set pricing standards, the Provincial People's Committee shall base its decision on the prices of adjacent land types that have been decided and in accordance with Clause 10, Article 1 of this Decree to determine appropriate prices. When unused land is permitted by competent authorities to be put into use, the Provincial People's Committee shall base its decision on the framework prices for similar land types and usage purposes as prescribed by the Government to set specific land prices.

2. Based on the actual transfer prices of land use rights in the locality, the Provincial People's Committee may decide specific land prices within the allowed range, which can be up to 20% higher than the maximum price and up to 20% lower than the minimum price of the framework prices for similar land types as prescribed by the Government in Clause 5, Article 1 of this Decree.

3. In exceptional cases, in remote areas, economically disadvantaged regions, or areas with poor infrastructure, if the actual market transfer prices of land use rights in these localities under normal conditions are lower than the minimum price of the framework prices for similar land types as prescribed in Clause 5, Article 1 of this Decree, the Provincial People's Committee shall decide specific application prices in the locality and report to the Ministry of Finance.

6. AMENDING AND SUPPLEMENTING ARTICLE 8 AS FOLLOWS:

a) Amend the title of Article 8:

"Article 8. Principles for zoning rural land for valuation"

b) Amend Point c, Clause 1:

"c) Mountainous areas are regions higher than midland areas, mainly consisting of high mountains with complex terrain. The population density is low, and the infrastructure and conditions for production and circulation of goods are less favorable compared to midland areas.

Rural communes in mountainous areas are classified according to the basic characteristics mentioned above and in accordance with guidelines from the Ethnic Minorities Commission (now the Ethnic Minorities Commission)."

c) Abolishing Clause 2.

6 ||| 7. Amend and supplement Article 9 as follows:

a) Amend the title of Article 9:

"Article 9. Determining the land area and location of specific rural land types for valuation"

b) Amend Point a, Clause 1:

"a) For annual crop land, perennial crop land, aquaculture land, production forest land, special-use forest land, protective forest land, and other agricultural land (as stipulated in Point d, Clause 4, Article 6 of Decree No. 181/2004/NĐ-CP), land prices are differentiated based on the location of the land within three types of communes: plains, midlands, and mountainous areas, according to administrative boundaries. The location of the land is determined based on the distance from the place of residence of the land users to the production site, the distance from the production site to the nearest concentrated market, and the convenience of transportation. Differentiation is made between land locations combining factors such as distance, soil quality, topography, climate, weather, and irrigation conditions across three regions: plains, midlands, and mountainous areas, distinguished based on commune-level administrative boundaries. The principle for determining land location is that Location 1 applies to land with the shortest distance from the place of residence of the land users to the production site, the closest distance to the nearest concentrated market, and the most convenient transportation. Subsequent locations from Location 2 onwards are further away and have less convenient transportation."

8. Amending and supplementing Article 11 as follows:

a) Amend the title of Article 11:

"Article 11. Authority for zoning streets and determining land locations for valuation"

b) Amend and supplement the content of Article 11:

"Based on the general provisions of Articles 8, 9, and 10 of Decree No. 188/2004/NĐ-CP and Clauses 6 and 7 of Article 1 of this Decree, and taking into account the actual situation of each locality, the Provincial People's Committee shall specify criteria and procedures for zoning, classifying, and determining land locations as the basis for valuation.

Annually, the Provincial People's Committee shall adjust the classification of land, street types, and land locations when changes occur due to planning adjustments, investment upgrades, or new construction of infrastructure affecting previous classifications."

9. Amend and supplement Point d, Clause 1 of Article 12 as follows:

"d) In cases where the same type of land borders provinces separated by rivers, lakes, canals, hills, passes, or mountains with a width of 100 meters or less, the border area of land shall be determined from the banks of the river, lake, canal, foot of the hill, pass, or mountain on each side, extending into the administrative boundary of each province according to Points a, b, and c, Clause 1 of Article 12 of Decree No. 188/2004/NĐ-CP. If the width of the river, lake, canal, hill, pass, or mountain exceeds 100 meters, it will not be classified as border land."

10. Amend Article 13 as follows:

"Article 13. Specific Land Valuation at the Local Level

1. On January 1st of each year, the Provincial People's Committee must:

a) Decide and publicly announce the zoning, classification of streets, and determination of land locations in accordance with Articles 8, 9, 10, and 11 of Decree No. 188/2004/NĐ-CP and Clauses 6, 7, and 8 of Article 1 of this Decree.

b) Decide and publicly announce the land price table applicable in the locality after seeking opinions from the same-level People's Council.

2. Methods for specific land valuation for each type of land

Land of a certain type shall apply the framework price prescribed by the Government for that type of land according to the principle:

a) For agricultural land used for annual crops, perennial crops, aquaculture, production forests, protective forests, special-purpose forests, and other types of agricultural land: the land at position 1 in each region (delta, midland, mountainous area) has the highest price, subsequent positions from position 2 onwards correspond to lower prices.

b) For salt-making land: the land at position number 1 has the highest price, subsequent positions from position 2 onwards correspond to lower prices.

c) For residential land; non-agricultural production and business land and other non-agricultural lands in rural areas:

Land in zone 1 has the highest price, subsequent zones of land from zone 2 onwards correspond to lower prices.

Within each zone of land, the land at position number 1 has the highest price, subsequent positions from position 2 onwards correspond to lower prices.

d) The land price in the following cases is determined by the level of perennial crop land price at position 1 in the same province:

- Garden and pond land within the same plot with a house but not identified as residential land;

- Agricultural land within the administrative boundary of a ward, within the urban residential area of a town, or within the rural residential area that has been delineated according to the planning approved by the competent state authority;

- In the case where agricultural land is within the urban residential area of a town or rural residential area without a planning approval, it shall be determined based on the boundary of the outermost plot with a house in the residential area.

Based on the actual situation in the locality, the provincial People's Committee may stipulate higher land prices in the above cases, but the maximum level shall not exceed twice the price of perennial crop land at position 1 in the same region as stipulated by the provincial People's Committee.

đ) For non-agricultural land in rural areas located along main traffic routes, traffic junctions, commercial areas, tourist areas, industrial zones, the provincial People's Committee shall base its regulations on the actual situation in the locality to determine appropriate prices according to the principle:

- For residential land, the price stipulated by the provincial People's Committee shall not exceed five times the maximum price of the residential land price range in rural areas as prescribed by the Government;

- For non-agricultural production and business land, the price stipulated by the provincial People's Committee shall not exceed three times the maximum price of the non-agricultural production and business land price range in rural areas as prescribed by the Government."

11. Amend point a clause 1 Article 14 as follows:

"a) When appraising land prices in border areas between provinces and centrally-administered municipalities, the People's Committees of provinces with adjacent land must base their agreements on the provisions of clause 1 Article 12 Decree No. 188/2004/NĐ-CP and clause 9 Article 1 of this Decree regarding land prices, plans to adjust land prices in border areas, according to the principle:

- Land in border areas belonging to which type of land shall apply the price range prescribed by the Government for that type of land;

- Land in border areas with similar natural conditions, infrastructure structures, and the same purpose of use shall have the same price level;

In exceptional cases, when economic and social conditions, and common infrastructure structures of each locality differ, the land prices in border areas may vary, but the maximum difference ratio shall not exceed 30%."

12. Amend Article 15 as follows:

"Article 15. Adjustment of specific land prices in localities

1. When the competent authority adjusts the land use planning and plan, changes the purpose of land use, type of city, type of street, and location of land, the provincial People's Committee shall base its adjustments on current regulations to appropriately adjust the land prices in the affected areas.

2. In cases where the State allocates land with payment for land use rights without going through public auction of land use rights or bidding for projects using land, the State recovers land, and in cases where state-owned enterprises choose the method of allocating land during the process of corporate transformation, if the land price stipulated by the provincial People's Committee at the time of land allocation, the time of land recovery decision, or the time of valuation for corporate transformation does not accurately reflect the actual market transfer price of land use rights under normal conditions, the provincial People's Committee shall base its specific price determination on the actual market transfer price of land use rights in the locality, without being limited by the provisions of clause 5 Article 1 of this Decree.

3. In all cases of adjusting land prices within the jurisdiction of certain plots, certain areas, or types of land in a year, the provincial People's Committee shall develop a plan to seek opinions from the Standing Committee of the People's Council at the same level before making a decision and report to the People's Council at the nearest session."

Article 2. Implementation Provisions

1. This Decree takes effect 15 days after its publication in the Official Gazette.

2. Repeal clause 4 Article 30 of Decree No. 109/2007/NĐ-CP dated June 26, 2007 on converting wholly state-owned enterprises into joint-stock companies; repeal clause 2 Article 4, clause 1 Article 5, and Article 6 of Decree No. 17/2006/NĐ-CP dated January 27, 2006 on amending and supplementing some articles of decrees guiding the implementation of the Land Law and Decree No. 187/2004/NĐ-CP on converting state-owned enterprises into joint-stock companies.

3. Provincial People's Committees shall base their issuance of specific land prices for public announcement and application from January 1st of each year on Decree No. 188/2004/NĐ-CP and this Decree.

4. Ministers, Heads of ministerial-level agencies, Heads of agencies under the Government, Chairmen of provincial and centrally-administered municipal People's Committees are responsible for implementing this Decree.

5. The Ministry of Finance shall provide guidance on the implementation of this Decree./.