Circular No. 145/2007/TT-BTC guiding the implementation of Government Decree No. 188/2004/NĐ-CP dated November 16, 2004 on methods for determining land prices and price ranges for various types of land, and Government Decree No. 123/2007/NĐ-CP dated July 27, 2007 amending and supplementing certain articles of Government Decree No. 188/2004/NĐ-CP.

CIRCULAR

Guidelines for implementing Decree No. 188/2004/ND-CP dated November 16, 2004

of the Government on methods for determining land prices and price ranges for various types of land

and Decree No. 123/2007/ND-CP dated July 27, 2007 of the Government amending and supplementing certain articles of Decree No. 188/2004/ND-CP

to amend and supplement certain articles of Decree No. 188/2004/ND-CP

_____________________

Pursuant to Decree No. 77/2003/ND-CP dated July 1, 2003 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Pursuant to Decree No. 188/2004/ND-CP dated November 16, 2004 of the Government on methods for determining land prices and price ranges for various types of land;

Pursuant to Decree No. 123/2007/ND-CP dated July 27, 2007 of the Government amending and supplementing certain articles of Decree No. 188/2004/ND-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, the Ministry of Finance issues guidelines for implementing Decree No. 188/2004/ND-CP dated November 16, 2004 of the Government on methods for determining land prices and price ranges for various types of land and Decree No. 123/2007/ND-CP dated July 27, 2007 of the Government amending and supplementing certain articles of Decree No. 188/2004/ND-CP (hereinafter referred to as Decree No. 188/2004/ND-CP and Decree No. 123/2007/ND-CP) as follows:

I. METHODS FOR DETERMINING LAND PRICES

1. Direct Comparison Method

Determining land prices using the direct comparison method must be carried out through the following steps:

a) Step 1: Surveying and collecting information

- Identifying the location of the plot of land or vacant land (land not yet developed with construction projects) that can be compared with the plot of land or vacant land whose price needs to be determined to collect relevant information.

For each type of land to be appraised, select from three to five plots of land or vacant lands located in adjacent or nearby areas to the plot of land or vacant land whose price needs to be determined, which have been successfully transferred on the market (including direct transactions between individuals and organizations; successful auctions of land use rights; successful transactions on real estate trading floors) having similar characteristics to the plot of land or vacant land whose price needs to be determined regarding: type of land, location, area size, infrastructure, legal status, and intended use.

- Time frame for collecting information:

The information to be collected must occur within the shortest possible time period relative to the survey date to determine the price of the plot of land or vacant land whose price needs to be determined.

In cases where such recent information cannot be obtained, information about land use right transfer transactions within one year prior to the survey date may be collected to determine the land price.

- Information to be collected:

+ Location;

+ Current land use status (type of land, area size and dimensions, topography, assets on the land, current intended use, intended use according to planning);

+ Infrastructure conditions;

+ Environment (including natural environment such as scenery, water sources, air, noise, etc., and social environment such as public order and security, educational level);

+ Legal characteristics (land use planning, construction planning in the area where the plot of land or vacant land is located; land use right certificate; degree of fulfillment of financial obligations related to land according to the law, etc.);

+ Transfer date, transaction date, or successful auction date of land use rights; transfer price, auction price of land use rights;

+ Transaction date, conditions, and payment terms.

- Conditions for the information:

The above information must be collected from actual land use right transfer transactions on the market under normal conditions as stipulated in Clause 2, Article 1 of Decree No. 123/2007/ND-CP.

b) Step 2: Comparing and analyzing information:

Based on the information surveyed and collected in Step 1, compile, analyze, and compare to identify common and different criteria among the plots of land or vacant lands being compared with the plot of land or vacant land whose price needs to be determined. On this basis, determine the common and different price criteria to calculate and determine the price for the plot of land or vacant land whose price needs to be determined.

c) Step 3: Adjusting the price differences between the plots of land or vacant lands being compared with the plot of land or vacant land whose price needs to be determined to determine the price for the plot of land whose price needs to be determined.

The estimated value of the plot of land or vacant land whose price needs to be determined is calculated by adjusting the price differences with each plot of land or vacant land being compared as follows:

Among these, the adjustment amount due to differences in location, infrastructure, legal characteristics, environmental pollution levels, etc., of each plot of land or vacant land being compared with the plot of land or vacant land whose price needs to be determined. The adjustment amount based on each difference between the compared plot of land and the plot of land whose price needs to be determined (which can be calculated as an absolute value or a percentage of the actual transfer price of the compared plot of land on the market under normal conditions in the locality, then converted to money) is determined based on the assessment of consulting organizations or experts and agencies directly responsible for determining land prices, advising the People's Committee at the provincial level to decide on specific land prices in the locality based on market evidence.

In the case where the land price fluctuates during the period from the time of successful transfer of the right to use the comparative plot of land to the time of determining the price of the plot of land to be appraised, before implementing the adjustment of the price level of the comparative plot of land according to the formula mentioned above, it is necessary to adjust (increase or decrease) the price level of the transfer of the right to use the comparative plot of land according to the fluctuation index (increase or decrease) of the type of land during this period. The fluctuation index of each type of land can be calculated based on information collected through surveys, investigations, and statistics of land prices by the Department of Finance or organizations providing land price consulting services, following the guidance provided in Circular No. 80/2005/TT-BTC dated September 15, 2005, issued by the Ministry of Finance, guiding the organization of a network for land price statistics and investigations, and reporting statistics on various types of land prices as stipulated in Decree No. 188/2004/NĐ-CP; or statistical data from the statistical agency (if available).

d) Step 4: Determine the price of the plot of land to be appraised by taking the average of the prices of three to five comparative plots of land that have been adjusted for price differences at Step 3.

Example of applying the comparison method to determine land price (see Appendix 1).

2) Income Method

Valuing land using the income method must follow the steps below:

a) Step 1: Calculate the total annual income derived from the plot of land, area to be appraised

- For vacant land or land with architectural structures (houses) leased out, the total income of the plot of land to be appraised is the rental fee for the land or the rental fee for real estate (including land and assets on the land) received annually. The rental fee for the land or the rental fee for real estate is calculated based on the market rental rate for land or real estate at the time of land valuation.

- For agricultural land where the person granted the land organizes production themselves, the total income is calculated as follows:

+ For annual crop land or aquaculture land, the total income of the plot of land to be appraised is the total revenue from the aforementioned production activities of the plot of land received annually.

+ For perennial crop land (fruit trees, industrial crops, timber trees), the total income is calculated based on annual revenue, phased revenue, or one-time revenue depending on the characteristics of each type of tree.

b) Step 2: Calculate the total annual expenses incurred to generate the total income

Total expenses include specific items such as land use tax, investment improvement costs, production costs. These expenses are calculated according to current regulations of the State; expenses not regulated by the State are calculated based on the actual prevailing prices in the local market as paid by the production and business entity (as stipulated in contracts, invoices for goods issued by authorized financial authorities).

For cases where the plot of land to be appraised has been developed with assets on the land, the total annual expenses do not include the basic depreciation of these assets on the land.

c) Step 3: Determine the net annual income according to the following formula:

d) Step 4: Estimate the land price to be appraised according to the following formula:

When valuing land using the income method, the total income, total 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 position of the type of land to be appraised and consistent with the approved land use purpose, averaged over the three years immediately preceding the valuation date. If data for the three years cannot be obtained, use the data from the year immediately preceding the land valuation date. Calculating total income and total expenses must be based on the market price level at the time of land valuation by applying unit prices for goods, materials, services, and labor wages at the time of land valuation to the volume of expenses and production output of the years (if the expense has a state-regulated price, calculate according to the state price, if the expense does not have a state-regulated price, calculate according to the market price level).

The interest rate on domestic currency savings deposits (VND) for a term of 12 months is the highest interest rate offered by commercial banks in the locality.

Example of applying the income method to determine land price (see Appendix 2).

For plots of land that have been developed with assets on the land (including buildings, houses, structures; or perennial crops such as rubber, coffee, tea, pepper, cashew, fruit trees, etc.) for business and production purposes, first apply the income method to estimate the value of the entire plot of land and assets on the land; then deduct the value of the assets on the land, the remainder being the value of the plot of land.

The method for calculating the deduction of the value of assets on the land is carried out as directed in point c, Section 3, Part I of this Circular.

3. Deduction Method

When applying the deduction method to value land, the following steps must be followed for each type of land:

a) Step 1: Collect market information to select at least three real estate properties (including land and assets on the land) that have successfully transferred, where the plots of land of these real estate properties have similar characteristics to the plot of land to be appraised (location, condition, infrastructure conditions, legal characteristics, purpose of use, price...).

The time frame for collecting market information applies as guided in Step 1 of the Direct Comparison Method.

b) Step 2: Conduct field surveys and accurately describe the assets on the land (including buildings, structures, perennial crops) of the aforementioned real estate properties.

c) Step 3: Determine the current value of the assets invested and constructed on the land.

Where:

- The value of new construction at the time of valuation is calculated based on the replacement cost to invest in building new assets with equivalent utility to the existing assets on the land or the reproduction cost (that is, investing in building new assets identical to those on the land). The value of new construction includes direct costs, indirect costs, and a reasonable rate of return for the investor.

- The depreciation value of assets on the land includes both tangible and intangible depreciation (including physical depreciation due to wear and tear during exploitation and use; depreciation due to obsolescence in function and from external factors).

The method for calculating the value of new construction and the depreciation value of assets on the land shall be carried out according to the current regulations of the Ministry of Construction, the Ministry of Finance, and the Vietnamese Valuation Standards. In cases where there are no specific regulations or guidelines regarding the calculation methods, the calculations shall be made based on the assessment of consultants, specialists, or organizations directly determining prices based on actual market information and data collected.

d) Step 4: Calculate the value of the plots of land of the selected real estate properties at Step 1

e) Step 5: Determine the value of the plot of land to be appraised

Based on the main differences between the plot of land to be appraised and the plots of land of the aforementioned real estate properties, adjust the prices of the plots of land of the real estate properties (similar to Step 3 of the direct comparison method).

The unit price of the plot of land to be appraised is determined according to the average unit price of the adjusted land prices of those real estate properties.

Example of applying the subtraction method to determine land price (see Appendix 3).

4. Residual Method

When applying the residual method to appraise land, the following steps must be carried out:

a) Step 1: Determine the best and most efficient use of the land based on the following grounds:

- Characteristics of the land;

- Regional planning, urban planning; construction planning and regulations; land use planning and plans already approved by competent authorities;

b) Step 2: Estimate the total development value of the real estate.

The total development value of the real estate includes the total value of houses, subdivided land, etc., expected to be sold upon completion of the investment project in the area.

The estimation of the total development value must be conducted based on surveys and investigations of actual transfer prices on the market for houses, apartments, architectural works, subdivided land, etc., in completed projects that have similar characteristics to the proposed real estate development projects in adjacent areas or nearby areas with comparable profitability and infrastructure conditions; taking into account trends and levels of market price fluctuations to estimate the expected selling price in line with reality.

c) Step 3: Estimate the total development costs.

Development costs include all expenses incurred by the investor to build infrastructure (including roads, water supply and drainage systems, electricity supply systems, etc.); create environmental landscapes; construct houses, architectural structures, or subdivided land for sale in accordance with detailed planning approved by competent authorities; advertising and sales costs; general management costs; and the investor's profit (taking into account business risk factors).

The estimation of total development costs must be determined based on unit prices, investment capital rates, standards according to guidelines or regulations of competent state agencies. In cases where there are no guidelines or regulations from competent state agencies, it should be determined based on the actual common costs of similar projects in adjacent areas or nearby areas.

In cases where the real estate development project extends over multiple years and different phases, and revenues and costs are estimated annually, then the revenues and costs must be discounted to their present value at the time of land appraisal using the following formula:

Total Development Value =

Total Development Costs =

Where:

- TR_i is the revenue of year i of the project

Ministry of Science and Technology: The Minister and Deputy Ministers, agencies and units under the Ministry;_i is the cost of year i of the project

- r is the discount rate for cash flows to present value (based on the lending interest rate of commercial banks for loans to implement the real estate development project)

- n is the number of years implementing the project (from commencement to completion of the real estate development project).

d) Step 4: Determine the value of the plot of land:

Example of applying the residual method to determine land price (see Appendix 4).

5. Conditions for Applying Methods to Determine Land Price

5.1. When applying methods to determine land prices, all necessary information and data required for calculations leading to conclusions about specific prices must be collected from the market under normal conditions, while analyzing and selecting accurate and highly reliable information and data.

5.2. In cases where sufficient information and data are available to apply all four methods to determine land prices, the direct comparison method should be used primarily to determine the land price.

5.3. In the following cases, at least two methods of determining land prices specified in this Circular must be combined to check, compare, and verify estimated prices to decide on specific prices:

- The transfer of land use rights has not become widespread on the market, and the collected data lacks systematicity;

- Market transfer prices of land use rights fluctuate irregularly, failing to reflect the normal supply-demand relationship for land;

- The estimated land price using one of the two methods of determining land prices exceeds the maximum price limit set by the Government in Clause 5, Article 1 of Decree No. 123/2007/NĐ-CP.

5.4. The above methods for determining land prices are applied to determine the value of specific plots of land, serving as a basis for appraising land collectively for each location according to the guidance provided in Part II of this Circular.

II. APPRAISING SPECIFIC LAND AT THE LOCAL LEVEL

1. Certain preparatory works for land valuation

a) Delimiting boundaries of areas: plains, midlands, and mountains according to administrative boundaries at the commune level to apply the framework prices for agricultural land, residential land, and non-agricultural production and business land in rural areas as prescribed by the Government for each region: plains, midlands, mountainous areas, and each type of commune in the locality (province, city) appropriately.

b) Specifying the locations of various types of agricultural land: annual crop land; perennial crop land; aquaculture land; production forest land; protective forest land; special-use forest land; and other agricultural land according to the principles stipulated in point b, Clause 7, Article 1 of Decree No. 123/2007/NĐ-CP.

The locations of various types of agricultural land are divided into positions with serial numbers starting from number 1. Determining the location of agricultural land mainly depends on factors such as distance from the place of residence of the land user, agricultural product consumption markets, proximity and convenience of transportation, which create advantages for producers to reduce travel costs, circulation costs (purchase of materials, sale of products), and consumption costs of products but also combine with factors that create advantages for production such as:

- Position 1 includes areas of land with similar economic and social conditions, similar infrastructure, and similar land use purposes: having from 1 to 3 factors regarding distance from the place of residence, consumption market, transportation market combined with the best advantages for agricultural production as specified below:

+ Being adjacent or closest to:

The place of residence of the land user, where the place of residence is defined as the center of the village (hamlet, ward, village where the land is located).

Agricultural product consumption market (rural markets, urban markets, centralized purchasing places for agricultural products).

Transportation routes (road transport including national highways, provincial roads; inter-district roads. In places without national highways, provincial roads, district roads, the basis is inter-commune roads; waterway transport (in places primarily using waterway transport) including rivers, streams, canals).

+ Having the best factors for agricultural production including flat terrain, active irrigation conditions, high soil fertility, favorable weather and climate for production and business.

- Positions in sequence from the second position onwards have conditions worse than position number 1 mentioned above.

For some specific cases, the classification of land positions is applied as follows:

+ If the land area has the best factors for agricultural production but has from 1 to 3 factors regarding greater distance from the place of residence of the land user, consumption market, transportation routes, it is still classified into lower land positions than position number 1.

+ If the land area has from 1 to 3 factors regarding being adjacent or closest to the place of residence of the land user, agricultural product consumption market, transportation routes, but has one or more factors for agricultural production only reaching average or below average levels, it is still classified into position number 1.

Based on the characteristics of each type of agricultural land and the characteristics of production and consumption of agricultural products in each region, each area of land in the locality, the Provincial People's Committee shall specify criteria and specific distances about land positions in sequence from number 1 to the final number and determine the number of positions in each area of land to determine the position of each type of agricultural land suitable for actual conditions in the locality.

c) Specifying specific criteria about land positions in sequence from number 1 to the final number suitable for local conditions and determining the number of salt-making land positions and the positions of various types of non-agricultural land in rural areas for land valuation based on the general criteria stipulated in point b, Clause 1, and Clause 2, Article 9 of Decree No. 188/2004/NĐ-CP, specifically as follows:

- For salt-making land: Based on specific conditions in the locality, the Provincial People's Committee classifies land positions according to criteria based on the distance from the salt field to the centralized salt warehouse in the production area or the distance from the salt field to the inter-district road (if there is no inter-district road passing through, the basis is the distance to the inter-commune road).

- For residential land; non-agricultural production and business land in rural areas: Based on specific conditions in the locality, the Provincial People's Committee determines the area of land to be valued; classifies land positions and decides the number of land positions in each area to be valued.

d) Specifying specific criteria about land positions to classify land positions and decide the number of land positions in each street type; classify streets and decide the number of streets in sequence from number 1 to the final number suitable for local conditions in each type of urban area for land valuation based on the general criteria stipulated in Article 10 of Decree No. 188/2004/NĐ-CP.

Based on specific conditions in the locality, the Provincial People's Committee may not classify streets but classify land positions and specify the number of land positions for each section of the street, each specific street to conduct land valuation. The classification of land positions, division of each section of the street, each street of each type of urban area for land valuation must also be carried out according to the general principles stipulated in Article 10 of Decree No. 188/2004/NĐ-CP.

e) The Provincial People's Committee bases its decision on the establishment of cities and the classification of cities approved by the competent authority for cities within the province to apply the framework prices for residential land and non-agricultural production and business land in urban areas as prescribed by the Government.

2. Valuation and adjustment of prices for specific types of land

a) Land price must be decided according to the correct purpose of land use recorded in one of the following documents:

- Certificate of land use rights issued in accordance with the laws on land or recorded in the documents stipulated in Article 50 of the Land Law 2003; in cases where the purpose of land use is not clearly stated, the purpose of land use is determined based on the main purpose of the land plot consistent with the land use plan at the time of land valuation;

- Decision on land allocation, land lease, or permission to change the purpose of land use by the competent state agency;

- Register the change of land use purpose in accordance with the provisions of the law.

For land that has not been issued a certificate of land use rights, does not have any of the types of documents specified in Article 50 of the Land Law 2003; has not yet had a plan or has a land use plan but it has not yet been implemented, and has not registered land use rights, then the land price shall be determined according to its current use purpose.

In cases where the land user uses the entire or part of the area of a plot of land for purposes other than those recognized by law or approved by competent authorities; uses agricultural land, including the types of land specified in Clause 1, Article 13 of the Land Law 2003 for intercropping, combined with organizing ecotourism, or uses non-agricultural land for other purposes, when determining the land price, it still follows the use purpose specified in the certificate of land use rights, the State's decision on land allocation or lease, land use plans, land registration mentioned above.

b) The specific price level of each position of land of various types of land shall be stipulated by the People's Committee of the province in Vietnamese Dong per unit area of land (m²) and must not exceed the framework of prices for various types of land and permissible limits prescribed by the Government in Clause 5, Article 1 of Decree No. 123/2007/ND-CP; except for the following cases:

- In individual cases when setting land prices to be announced on January 1st each year, if within the provincial territory (as provided in Point 3, Clause 5, Article 1 of Decree No. 123/2007/ND-CP), there are types of land in remote areas, mountainous regions, midland, coastal areas with difficult natural conditions, economic and social difficulties or extremely difficult conditions as guided by the State or regulated by the provincial People's Committee, which have not been invested in infrastructure construction or have poor infrastructure; some areas of residential land, non-agricultural production and business land, or land planned as residential or non-agricultural production and business land in urban wards, market towns located in mountainous and midland areas but have not been invested in infrastructure construction. If the actual market price of land transfer transactions for these types of land in such areas is lower than the minimum price level of the framework of land prices and permissible limits stipulated by the provincial People's Committee in Clause 5, Article 1 of Decree No. 123/2007/ND-CP, then the provincial People's Committee may decide on a specific land price lower than the aforementioned levels, while submitting the decision on the specific land price for such individual cases along with a summary of the actual market price survey results of these types of land with individual low prices to the Ministry of Finance for inspection (if necessary).

- In cases where the State allocates land with payment of land use fees, leases land 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 specific land price stipulated and announced by the provincial People's Committee on January 1st each year for applying to the land subject to the policies at the time of land allocation, the time of the land recovery decision, and the time of calculating the land price into the value of the corporate transformation enterprise is not close to the actual market price of land transfer transactions under normal conditions, then the provincial People's Committee shall adjust the specific land price based on the actual market price of land transfer transactions in the locality and the valuation methods stipulated in this Circular to replace the previously stipulated and announced price, applicable to the land subject to the policies at the appropriate time (after seeking opinions from the Standing Committee of the Provincial People's Council).

The Department of Finance shall take the lead and coordinate with relevant departments to determine specific land prices and submit them to the provincial People's Committee for decision; in cases where organizations or businesses with appraisal functions or consulting on land prices are hired to determine land prices, the Department of Finance shall take the lead and coordinate with relevant departments to appraise the land prices determined by organizations or businesses with appraisal functions or consulting on land prices, and submit the specific land prices of plots of land to the provincial People's Committee for decision, ensuring they closely match the actual market price of land transfer transactions under normal conditions.

The specific land price stipulated in this case is not limited by the land price framework prescribed by the Government in Clause 5, Article 1 of Decree No. 123/2007/ND-CP; however, it must not exceed the actual market price of land transfer transactions.

The determination of this specific land price only applies individually within the scope of each project, serving the purposes: to calculate land use fees when the State allocates land without going through public auction of land use rights or bidding for projects using land; to calculate compensation for land losses when the State recovers land; and to calculate the land use right price into the value when state-owned enterprises choose the method of allocating land during the process of corporate transformation. For other purposes outside those mentioned above, the common land price stipulated by the provincial People's Committee for each position of land in that area shall apply.

- The cases stipulated in Points 2: d and đ, Clause 10, Article 1 of Decree No. 123/2007/ND-CP also apply when setting land prices to be announced on January 1st each year.

For residential land and non-agricultural production and business land in rural areas located at special positions specified in Point d Clause 10 Article 1 of Decree No. 123/2007/NĐ-CP, including types of land with frontage adjacent to main traffic routes (provincial roads, national highways) or adjacent to traffic hubs, commercial zones, industrial zones, and tourist areas, the Provincial People's Council is authorized to set specific land prices for the best locations of these two types of land in accordance with the local market transfer price under normal conditions but not exceeding five times the maximum level of the rural residential land price framework and not more than three times the maximum level of the rural non-agricultural production and business land price framework as prescribed by the Government in Tables 6 and 8 of the Land Price Framework issued together with Decree No. 123/2007/NĐ-CP (excluding the portion allowing the Provincial People's Council to set higher prices up to 20% above the maximum levels of the land price frameworks).

- When the competent authority carries out:

+ Adjusting the land use planning and plan, if the market price of land in those areas changes compared to the announced land price on January 1st each year, the Provincial People's Council adjusts the price accordingly in line with current regulations.

+ Deciding on changing the purpose of land use, the Provincial People's Council adjusts the land price according to the new land use purpose price framework prescribed by the Government.

+ Deciding to upgrade urban areas from lower categories to higher categories, the Provincial People's Council adjusts the land prices from the lower category urban land prices to the higher category urban land prices in accordance with the Government-prescribed price framework but not exceeding the actual market transfer price under normal conditions at that time.

In all cases of adjusting land prices within the year mentioned above, the Provincial People's Council must seek the opinions of the Standing Committee of the People's Council at the same level before making a decision.

c) Setting specific prices for individual land positions for types of land for which the Government has prescribed land price frameworks:

- For annual crop land, perennial crop land, aquaculture land, and production forest land, pricing is conducted for each land position; land at Position 1 has the highest price, and subsequent positions have progressively lower prices.

If the same type of agricultural land mentioned above is used for growing or raising different types of crops or animals, only one unified land price is set for each position based on the predominant crop or animal in the region (for example, rice land in annual crop land regions); the same position of the same type of agricultural land in the same region is not priced differently based on different crops or animals.

- For salt-making land, pricing is conducted based on land positions; land at Position 1 has the highest price, and subsequent positions have progressively lower prices.

- For residential land and non-agricultural production and business land in rural areas, pricing is conducted based on land positions in three regional areas of the locality. Based on criteria for classifying land positions, the Provincial People's Council establishes land valuation location coefficients for each area according to the principle: land at Position 1 in each area has the highest price in that area, and subsequent positions in corresponding areas have progressively lower prices.

The Provincial People's Council specifies detailed criteria and the number of positions for this type of land for valuation purposes.

- For residential land and non-agricultural production and business land in urban areas, land pricing is conducted based on land positions for each street of different types of cities.

Depending on specific local conditions, mass valuation for individual land positions can be carried out using one of the following two methods:

+ Method One: Direct valuation for each land position

Mass valuation for individual land positions is based on the results of valuing specific plots of land at each position; the method proceeds as follows:

In each position of the selected specific land type, select a minimum of three (03) plots of land at different representative locations for that position. Then, determine the price of each plot of land by applying land valuation methods as guided in Part I of this Circular and calculate the price per square meter (m²) of each plot.²of each plot of land.

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

+ Method Two: Valuation of Position 1, then using land position coefficients to value remaining positions

The method for determining the price of Position 1 is carried out similarly to direct valuation for each position in Method One.

Based on criteria for classifying land positions, the Provincial People's Council establishes land valuation location coefficients for each type of land according to each area or street type according to the principle: land at Position 1 has a coefficient of 1, and subsequent positions have lower coefficients corresponding to lower prices.

The land valuation location coefficients for all the aforementioned types of land are ratios comparing the actual common market transfer price of land at each position to Position 1, or ratios comparing the criteria of each position.

The price of all types of land valued according to position is calculated by multiplying the price of the confirmed land position (Position 1) by the land valuation location coefficient for each type of land.

Example: The land valuation agency is currently determining the land price at Street H in a special city to prepare a land price plan for submission to the Provincial People's Council for consideration and decision. Applying land valuation methods, the agency has calculated the price of Position 1 at 54,000,000 VND/m².²Land for residential purposes on Street H is divided into four different land positions; based on criteria for classifying land positions and actual market prices for transferring land use rights in that area, the valuation agency has established valuation coefficients for land positions from position 1 to position 4 on Street H in the following order: 1; 0.45; 0.35; 0.30. The price of land for positions subsequent to position number 1 is determined as follows:

For residential land and non-agricultural production and business land in towns and townships not classified as urban areas by competent authorities and not adjacent to classified urban areas, when determining specific land prices, the framework price for residential land and non-agricultural production and business land in urban areas of type IV for towns and urban areas of type V for townships shall be applied, but it must not exceed the actual market price for transferring land use rights under normal conditions at the time of valuation.

For residential land and non-agricultural production and business land in new urban areas adjacent to urban areas already classified by competent authorities, when determining specific land prices, the framework price for residential land and non-agricultural production and business land in the adjacent urban area or the nearest nearby urban area shall be applied, but it must not exceed the actual market price for transferring land use rights under normal conditions at the time of valuation.

d) Specific valuation for types of land for which the Government does not specify a framework price:

- For protective forest land and special-use forest land: Based on the specific price level set by the provincial People's Committee for production forest land, the specific price for protective forest land and special-use forest land is determined. The valuation process for protective forest land and special-use forest land follows the valuation process for production forest land as stipulated in point c, Section 2, Part II of this Circular.

The maximum specific price for each position of protective forest land and special-use forest land shall not exceed the specific price level set by the provincial People's Committee for each position of production forest land.

Specifically, for special-use forests located in positions combined with scenic views, eco-tourism, and environmental protection under the forest canopy, if authorized to lease land for organizing tourism service activities, the provincial People's Committee shall determine the specific land price based on the guidance provided in this Circular and the provisions of Decree No. 48/2007/NĐ-CP dated March 28, 2007 of the Government on principles and methods for determining prices of various types of forests, in accordance with local actual conditions.

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

The price of other types of agricultural land is determined based on the specific land price level set by the provincial People's Committee for adjacent agricultural land or in the nearest surrounding area within the same region (if there is no adjacent land).

The specific land price level prescribed for each type of other agricultural land shall not exceed the specific price level set by the provincial People's Committee for adjacent agricultural land or agricultural land in the nearest surrounding area.

- For land for constructing office premises and public works; land used for national defense and security purposes; religious and belief land (including land used by religious facilities, land with structures such as temples, shrines, pagodas, hermitages, ancestral halls, family churches); other non-agricultural land (including land for museums, conservation houses, art exhibition houses, cultural and artistic creation bases), the provincial People's Committee shall base the specific land price on the price of adjacent residential land or the nearest surrounding residential area (in case there is no adjacent land) as decided and according to Clause 10, Article 1 of Decree No. 123/2007/NĐ-CP. If these lands are located in rural areas, they shall be based on the price of residential land in those rural areas; if located in urban areas, they shall be based on the price of residential land in those urban areas.

Based on the characteristics of each type of land (area size, construction density, rights and obligations of land users), the provincial People's Committee shall prescribe specific land prices for each position of these types of land appropriately but not higher than the specific price level prescribed for similar residential land positions adjacent or in the nearest surrounding area (if there is no adjacent land).

- For land used for public purposes as specified by the Government; other non-agricultural land (including private construction projects not for business purposes and not attached to residential land; land for workers' rest houses, camps; urban land used for building houses for farming purposes, including indirect farming methods; land for animal husbandry buildings permitted by law; land for agricultural, forestry, and aquaculture research stations; land for household and individual storage houses for agricultural products, plant protection chemicals, fertilizers, agricultural machinery and tools), the provincial People's Committee shall base the specific land price on the price of adjacent non-agricultural production and business land or in the nearest surrounding area (in case there is no adjacent land) as decided and according to Clause 10, Article 1 of Decree No. 123/2007/NĐ-CP.

The specific land price prescribed for each position of the aforementioned types of land shall not exceed the specific price level prescribed by the provincial People's Committee for similar positions of adjacent non-agricultural production and business land or in the nearest surrounding area (in case there is no adjacent land).

- For cemetery and burial ground land: Based on the specific price level set by the provincial People's Committee for adjacent land types, the specific price for the aforementioned land types is determined. In cases where the aforementioned land type is adjacent to multiple types of land, the price of the land type with the lowest price level shall be referenced.

The specific price level prescribed for each land position of the aforementioned type of land shall not exceed the specific price level that the provincial People's Committee has stipulated for similar positions of adjacent land types.

- For river, stream, canal, creek, and water surface dedicated to aquaculture purposes, apply the framework price for aquaculture land; if used for non-agricultural purposes or combined with aquaculture activities, the provincial People's Committee shall base on the price of adjacent non-agricultural land or the nearest nearby area (if there is no adjacent land) and according to Clause 10, Article 1 of Decree No. 123/2007/NĐ-CP to specify the specific price level.

3. Valuation of land in border areas:

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

- In cases where land in border areas between provinces and centrally-administered cities have the same natural conditions, infrastructure structures, current land use purposes, and planned land use purposes, the determination of land prices shall be carried out as follows:

+ Define the boundaries of various types of land in border areas based on the provisions of Clause 1, Article 12 of Decree No. 188/2004/NĐ-CP and Clause 9, Article 1 of Decree No. 123/2007/NĐ-CP.

+ Before deciding on land prices in border areas, the provincial People's Committees of the provinces with border lands must consult, exchange, and agree with each other on the proposed price levels to ensure compliance with Clause 11, Article 1 of Decree No. 123/2007/NĐ-CP when determining specific land prices in border areas.

+ If localities cannot reach an agreement on the price levels in border areas, they shall report to the Prime Minister for decision.

- In cases where land in border areas between provinces and centrally-administered cities have different natural conditions, infrastructure structures, current land use purposes, and planned land use purposes, the provincial People's Committee shall determine specific land prices in these areas based on the actual conditions of each locality.

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

Based on the actual situation in the locality, the provincial People's Committee shall stipulate land prices in border areas in accordance with the principle: If the natural conditions, infrastructure structures, current land use purposes, and planned land use purposes are the same, the prices shall be the same, within the distance defined by the province.

In cases where the infrastructure conditions in border areas are different, 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 and towns belonging to special-class and first-class cities, and villages (wards) bordering the inner city, towns of the remaining cities), the land prices in these areas shall be determined according to the valuation principles for adjacent land plots and shall apply the framework price for the adjacent urban type as prescribed by the Government.

The provincial People's Committee shall stipulate specific land prices for 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; Decree No. 123/2007/NĐ-CP and the guidance contents in this Circular, the provincial People's Committee shall decide on specific land prices; publicly announce and inspect the implementation of the land price list at the local level.

2. Annually, the provincial People's Committee shall allocate a budget from the local government funds to conduct investigations, surveys, statistics on land transfer prices, hire consultants for land prices, and value various types of land, organize training sessions to implement decisions on land prices, and organize training and professional development for land management staff at the local level. Management of this fund shall be carried out in accordance with current state regulations.

The provincial People's Committee shall direct the Department of Finance to establish a network to monitor and statistically record actual land transfer prices in the local market. Regularly report to the Ministry of Finance as prescribed. In cases where actual land transfer prices in the local market fluctuate continuously and persistently, causing significant price discrepancies, reports must be made to the Ministry of Finance for consolidation and submission to the Government for consideration and adjustment of the framework prices for various types of land.

This Circular takes effect fifteen days after its publication in the Official Gazette.

This Circular replaces Circular No. 114/2004/TT-BTC dated November 26, 2004, issued by the Ministry of Finance guiding the implementation of Decree No. 188/2004/NĐ-CP.

During the implementation of this Circular, if any difficulties arise, the provincial People's Committees are requested to report to the Ministry of Finance for guidance and resolution./.