This Circular guides the determination of initial prices and financial regimes in the auctioning activities for land use rights to transfer land with land use fees or lease land, applicable to state agencies, professional auction organizations, Auction Committees, and participants in auctions. Detailed provisions on determining initial prices, participation fees, expenditure items, management of advance payment amounts, and submission of proceeds from auctions.
Scope of application
State agencies (Department of Finance, Provincial People's Committee), professional auction organizations, Land Use Rights Auction Committees, and participants in land use rights auctions.
Key points
- Organizations developing land funds or agencies entrusted to handle land use rights auctions → must determine initial prices and financial regimes according to laws on land, not within the scope regulated by this Circular.
- The initial price of land use rights for auctions to transfer land with land use fees or lease land with one-time rental payments shall be determined close to actual market transfer prices and not lower than the land price stipulated by the Provincial People's Committee.
- Participation fee for land use rights auctions: VND 100,000 - VND 500,000 per application, depending on the value of land use rights; VND 1,000,000 - VND 5,000,000 per application, depending on the land area.
- Service fees for land use rights auctions paid to professional auction organizations: from VND 15 million + 1% on the difference in the value of land use rights up to VND 65 million + 1% on the difference in the value of land use rights, depending on the initial price.
- The Department of Finance and agencies entrusted to handle land use rights auctions → prepare budget estimates for auction expenses, manage and use costs, and report final accounts as prescribed by law.
🌐 Social impact of this document
- Positive impact: Enhance transparency in the process of land use rights auctions, ensuring fairness for all parties involved.
- Negative impact: Organizing costs for auctions may increase due to regulations on participation fees and service fees for auctions.
- The individuals and businesses most affected are those participating in land use rights auctions.
❓ Frequently asked questions
How is the initial price of land use rights for auctions determined?
The initial price is determined close to actual market transfer prices and not lower than the land price stipulated by the Provincial People's Committee.
What is the participation fee for land use rights auctions?
Participation fee for land use rights auctions: VND 100,000 - VND 500,000 per application, depending on the value of land use rights; VND 1,000,000 - VND 5,000,000 per application, depending on the land area.
What are the service fees for land use rights auctions paid to professional auction organizations?
Service fees: from VND 15 million + 1% on the difference in the value of land use rights up to VND 65 million + 1% on the difference in the value of land use rights, depending on the initial price.
What responsibilities do the Department of Finance and agencies entrusted to handle land use rights auctions have?
Prepare budget estimates for auction expenses, manage and use costs, and report final accounts as prescribed by law.
For how long can professional auction organizations collect advance payments from applicants registering to participate in auctions?
Professional auction organizations may only collect advance payments up to four working days before the date of the auction session.
Full text
CIRCULAR
Guidelines for determining the initial price and financial regime in the auction of land use rights
to transfer land with payment of land use fees or lease land
____________________________
Pursuant to Decree No. 17/2010/NĐ-CP dated March 4, 2010 of the Government on selling assets through public auction;
Pursuant to Decree No. 120/2010/NĐ-CP dated December 30, 2010 of the Government amending and supplementing certain articles of Decree No. 198/2004/NĐ-CP dated December 3, 2004 of the Government on collecting land use fees;
Pursuant to Decree No. 121/2010/NĐ-CP dated December 30, 2010 of the Government amending and supplementing certain articles of Decree No. 142/2005/NĐ-CP dated November 14, 2005 of the Government on collecting land rental fees and water surface rental fees;
Pursuant to Decree No. 57/2002/NĐ-CP dated June 3, 2002 of the Government detailing the implementation of the Law on Fees and Charges; Decree No. 24/2006/NĐ-CP dated March 6, 2006 of the Government amending and supplementing certain articles of Decree No. 57/2002/NĐ-CP dated June 3, 2002;
Pursuant to the Decree No. 118/2008/NĐ-CP dated November 27, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;
Pursuant to Decision No. 216/2005/QĐ-TTg dated August 31, 2005 of the Prime Minister on promulgating the Auction Regulations for Land Use Rights to Transfer Land with Payment of Land Use Fees or Lease Land;
The Ministry of Finance provides guidelines for determining the initial price and financial regime in the auction of land use rights to transfer land with payment of land use fees or lease land as follows:
PART I
GENERAL PROVISIONS
Article 1. Scope of Regulation
Article 1. This Circular guides the determination of the initial price and financial regime in the auction of land use rights to transfer land with payment of land use fees or lease land according to the laws on land.
Article 2. The determination of the initial price and financial regime in the auction of land use rights with attached state-owned assets shall be carried out in accordance with Circular No. 137/2010/TT-BTC dated September 15, 2010 of the Ministry of Finance on the determination of the initial price of state-owned assets sold at public auction and the financial regime of the Public Auction Asset Sale Council (hereinafter referred to as Circular No. 137/2010/TT-BTC); it does not fall within the scope of adjustment of this Circular.
Article 2. Applicability
1. Land development fund organizations or agencies authorized by competent People's Committees to handle the auction of land use rights (hereinafter collectively referred to as agencies authorized to handle the auction of land use rights).
2. Property service centers for public auctions, asset sale enterprises stipulated in Decree No. 17/2010/NĐ-CP dated March 4, 2010 of the Government on selling assets through public auction (hereinafter collectively referred to as professional auction organizations), Land Use Rights Auction Councils.
3. Organizations and individuals participating in the auction of land use rights.
4. Other entities related to the auction of land use rights to transfer land with payment of land use fees or lease land..
Chapter II
DETERMINATION OF THE INITIAL PRICE FOR AUCTIONED LAND USE RIGHTS
Article 3. Principles for Determining the Initial Price
Point 1. The initial price for auctioned land use rights to transfer land with payment of land use fees or lease land with one-time payment of rent shall be determined close to the actual market price for transferring land use rights under normal conditions at the time when the competent state authority decides to auction the land use rights according to the new purpose of the auctioned plot; it must not be lower than the land price in the Land Price Table issued by the provincial People's Committee according to the law (hereinafter referred to as the land price stipulated by the provincial People's Committee).
Point 2. The initial price for auctioned land use rights to lease land with annual payment of rent is the rental rate calculated based on the actual market price for transferring land use rights under normal conditions at the time when the competent state authority decides to auction the land lease rights according to the new purpose of the auctioned plot multiplied by (x) the percentage of the rental rate stipulated by the provincial People's Committee.
Article 4. Method for Determining the Starting Price
1. The determination of the starting price for land use rights shall be carried out in accordance with the Government's regulations on the method for determining land prices (direct comparison method, income approach, cost approach, and residual method).
2. In cases where other methods not specified in Clause 1 of this Article are used to determine the starting price for land use rights, they must comply with the State's regulations on valuation methods in the Vietnamese Valuation Standards.
Article 5. Procedure and Authority for Determining the Starting Price
1. The procedure and authority for determining the starting price in cases of auctioning land use rights for transferring land with payment of land use fees or leasing land with one-time payment of lease fees shall be implemented as follows:
a) The agency responsible for handling the auction of land use rights shall submit a request for determination of the starting price to the Department of Finance. The dossier includes:
- A document requesting the determination of the starting price;
- Decision approving the land use plan;
- Decision approving the auction land fund;
- Decision on land recovery;
- Survey results on prices (if available).
b) The Department of Finance shall cooperate with relevant departments to determine the starting price and report to the Chairman of the Provincial People's Committee for decision as follows:
- If the land price set by the Provincial People's Committee is close to the actual market price of land transfer under normal conditions, the land price set by the Provincial People's Committee shall be used as the starting price.
- If the land price set by the Provincial People's Committee is not close to the actual market price of land transfer under normal conditions, the starting price shall be determined in one of the following two ways:
+ The Department of Finance shall hire an organization that meets the conditions for valuation activities to determine the land price; based on the land price determined by the valuation organization, the Department of Finance shall coordinate with the Department of Natural Resources and Environment, the Tax Service, and related agencies to review and report to the Chairman of the Provincial People's Committee for decision on the starting price. The selection of the valuation organization shall be carried out in accordance with the law on valuation.
+ In cases where there are no conditions to hire a valuation organization or the value of the land plot is small (based on the Land Price Table issued by the Provincial People's Committee according to the type of land being auctioned): less than 15 billion VND for centrally-administered cities; less than 5 billion VND for mountainous and highland provinces; less than 10 billion VND for other provinces, the Department of Finance shall report to the Chairman of the Provincial People's Committee for permission to coordinate with the Department of Natural Resources and Environment, the Tax Service, and related agencies to determine and report to the Chairman of the Provincial People's Committee for decision.
2. The procedure and authority for determining the starting price in cases of auctioning land use rights for leasing land with annual payment of lease fees:
a) The agency responsible for handling the auction of land use rights shall submit a request for determination of the starting price to the Department of Finance. The dossier includes:
- A document requesting the determination of the starting price;
- Decision approving the land use plan;
- Decision approving the auction land fund;
- Decision on land recovery;
- Survey results on prices (if available).
b) The Department of Finance shall cooperate with relevant agencies to examine the suitability of the land price set by the Provincial People's Committee with the actual market price of land under normal conditions, determine the land price as the starting price for organizing the auction and report to the Chairman of the Provincial People's Committee for decision as follows:
- If the land price set by the Provincial People's Committee is close to the actual market price of land transfer under normal conditions, the starting price shall be determined based on the land price set by the Provincial People's Committee and the percentage of the unit rental price set by the Provincial People's Committee.
- If the land price set by the Provincial People's Committee is not close to the actual market price of land transfer under normal conditions, the starting price shall be determined in one of the following two ways:
+ The Department of Finance shall hire an organization that meets the conditions for valuation activities to determine the land price; based on the land price determined by the valuation organization, the Department of Finance shall coordinate with the Department of Natural Resources and Environment, the Tax Service, and related agencies to review and report to the Chairman of the Provincial People's Committee for decision on the starting price. The selection of the valuation organization shall be carried out in accordance with the law on valuation.
+ In cases where there are no conditions to hire a valuation organization or the value of the land plot is small (based on the Land Price Table issued by the Provincial People's Committee according to the type of land being auctioned): less than 15 billion VND for centrally-administered cities; less than 5 billion VND for mountainous and highland provinces; less than 10 billion VND for other provinces, the Department of Finance shall report to the Provincial People's Committee for permission to coordinate with the Department of Natural Resources and Environment, the Tax Service, and related agencies to determine and report to the Chairman of the Provincial People's Committee for decision.
Article 6. Re-determination of the Starting Price
In cases where the auction fails due to a high starting price, the agency responsible for handling land use rights auctions shall issue a document to send to the Department of Finance to report to the Chairman of the Provincial People's Committee for consideration and decision on re-determining the starting price for re-auctioning. The principles, methods, and procedures for re-determining the starting price shall be carried out as prescribed for the initial determination of the starting price.
Chapter III
AUCTION BOARD FOR LAND USE RIGHTS
Article 7. Conditions for Establishing the Auction Board for Land Use Rights
The Auction Board for Land Use Rights shall be established in the following cases:
1. Land with a high value:
a) For centrally-administered cities: A starting price of VND 10,000 billion or more for the entire project or land area.
b) For mountainous and highland provinces: A starting price of VND 3,000 billion or more for the entire project or land area.
c) For other provinces: A starting price of VND 5,000 billion or more for the entire project or land area.
The above values are minimum levels. Based on actual conditions of the locality, the Provincial People's Committee shall decide on specific values as the basis for establishing the Board but must not be lower than the corresponding levels mentioned above.
2. Land with complex circumstances as stipulated by law.
3. Cases where the auctioned land does not meet the conditions specified in Clause 1 and Clause 2 of this Article and cannot hire professional auction organizations to carry out the auction.
Article 8. Authority to Decide and Composition of the Auction Board for Land Use Rights
1. The Chairman of the People's Committee at the level with authority to decide on the auction of land use rights shall decide to establish the Auction Board for Land Use Rights to conduct the auction of land use rights in special cases as stipulated in Article 7 of this Circular.
2. The composition of the Board includes: The leader of the same-level People's Committee (or their authorized representative) serving as Chairperson; members representing the agencies: Natural Resources and Environment, Finance, Justice, Inspection, Construction, the agency entrusted with handling the auction of land use rights, and representatives of relevant agencies, organizations, and units.
Chapter IV
FINANCIAL REGIME IN THE ACTIVITY
OF AUCTIONING LAND USE RIGHTS
Article 9. Sources of Funding for the Activity of Auctioning Land Use Rights
1. Sources of funding for the activity of auctioning land use rights include:
a) State budget estimates allocated to the Department of Finance and the agency entrusted with handling the auction of land use rights;
b) Fees from participants in the auction of land use rights as stipulated in Article 10 of this Circular;
c) Advance payment of those who registered to participate in the auction but did not participate in the auction without being in a force majeure situation, those who refused to purchase the asset after being announced as the successful bidder, or those who violated the Auction Regulations as stipulated in Decree No. 17/2010/NĐ-CP dated March 4, 2010 of the Government on Auctioning Assets;
d) Other legitimate sources of funding as prescribed by law.
2. Professional auction organizations and the Auction Board shall be responsible for collecting fees from participants in the auction of land use rights and advance payments from those who registered to participate in the auction as stipulated in Clause 1 of this Article and shall use them to pay permitted expenses as stipulated in Clause 2 of Article 11 of this Circular according to the Minutes of the Auction Contract Settlement; the remainder shall be transferred to the agency entrusted with handling the auction of land use rights to settle remaining expenses as stipulated in Article 11 of this Circular.
Article 10. Level of fees for participating in the auction of land use rights
1. In cases where the auction of land use rights is for households and individuals to invest in building houses:
|
Serial number |
The value of land use rights based on the initial price |
Maximum collection amount (VND/document) |
|
1 |
Up to VND 200 million |
100.000 |
|
2 |
From VND 200 million to VND 500 million |
200.000 |
|
3 |
Over VND 500 million |
500.000 |
2. In cases where the auction of land use rights does not fall within the scope of Clause 1 of this Article:
|
Serial number |
- Column (12): Record specific disposal methods in accordance with Article 87 of the Law on Management and Use of Public Property. |
Maximum collection amount (VND/document) |
|
1 |
Up to 0.5 hectares |
1.000.000 |
|
2 |
From 0.5 hectares to 2 hectares |
3.000.000 |
|
3 |
From 2 hectares to 5 hectares |
4.000.000 |
|
4 |
Over 5 hectares |
5.000.000 |
If the auction cannot be organized, then the organizations and individuals participating in the auction shall be fully refunded the participation auction fee they have paid within two working days from the date of the planned auction session.
3. Depending on the specific conditions of each locality, the Provincial People's Council shall decide on the level of fees for participating in the auction of land use rights in accordance with the provisions of Clauses 1 and 2 of this Article but shall not exceed the prescribed levels.
Article 11. Content of Expenses
1. Contents of expenditure of the Department of Finance of provinces and centrally governed cities:
a) Costs for land price surveys;
b) Costs for hiring appraisal organizations to determine the starting price;
c) Costs for determining and re-determining land prices;
d) Costs for land price appraisals.
2. Contents of expenditure for organizing the auction of land use rights:
a) Contents of expenditure of professional auction organizations: These are service costs that the agency entrusted with handling the auction of land use rights must pay to professional auction organizations to organize the auction from the time the Auction Sale Contract is signed, including: Preparing the auction dossier, publicizing, announcing publicly, receiving registration forms for participation in the auction, organizing property viewing and answering related questions; organizing the auction session and completing the auction result dossier.
b) Contents of expenditure of the Land Use Rights Auction Committee:
- Costs for preparing the auction dossier, publicizing, announcing publicly, receiving registration forms for participation in the auction, organizing property viewing and answering related questions;
- Costs for organizing the auction session and completing the auction result dossier.
3. Contents of expenditure of the agency entrusted with handling the auction of land use rights:
a) Expenses for surveying, dividing plots, and determining boundary markers;
b) Costs for preparing the auction plan;
c) Costs for preparing the dossier and performing the procedures for transferring land and related documents to the successful bidder for registration of land use right certificates;
d) Other costs directly related to the auction of land use rights carried out by the agency entrusted with handling the auction of land use rights.
Article 12. Levels of Expenditure
1. For expenditures that have standards, norms, and unit prices prescribed by competent state agencies, they shall be implemented according to current regulations.
2. Costs for determining the starting price:
a) Costs for land price surveys shall be implemented according to the financial system for expenses of investigations funded from the state budget;
b) Costs for hiring appraisal organizations shall be implemented according to the contract between the Department of Finance and the appraisal organization or the results of bidding for appraisal services;
c) For expenditures that do not have standards, norms, and unit prices prescribed by competent state agencies, the Director of the Department of Finance shall decide on the expenditure but must ensure it is consistent with the current financial management system of the State and bear responsibility for their decision.
3. Service costs paid to professional auction organizations shall be implemented according to the provisions of Article 13 of this Circular.
4. For other expenditures that do not have standards, norms, and unit prices prescribed by competent state agencies, the head of the agency entrusted with handling the auction of land use rights shall decide on the expenditure, except for the contents of expenditure for determining the starting price, but must ensure it is consistent with the current financial management system of the State and bear responsibility for their decision.
Article 13. Auction service fees for land use rights paid to professional auction organizations
1. The level of auction service fees payable to professional auction organizations in cases where the auction is successful shall be stipulated as follows:
|
Serial number |
Value of the right to use land according to the starting price/contract |
Fee Level |
|
1 |
Up to 1 billion dong |
15 million VND plus 1% on the difference in value of the land use rights between the winning bid price and the starting price |
|
2 |
Over 1 billion VND up to 5 billion VND |
25 million VND plus 1% on the difference in value of the land use rights between the winning bid price and the starting price |
|
3 |
Over 5 billion VND up to 10 billion VND |
35 million VND plus 1% on the difference in value of the land use rights between the winning bid price and the starting price |
|
4 |
From over 10 billion dong up to 50 billion VND |
45 million VND plus 1% on the difference in value of the land use rights between the winning bid price and the starting price |
|
5 |
Over 50 billion dong up to 100 billion VND |
55 million VND plus 1% on the difference in value of the land use rights between the winning bid price and the starting price |
|
6 |
From over 100 billion dong |
65 million VND plus 1% on the difference in value of the land use rights between the winning bid price and the starting price |
2. The level of fees prescribed in Clause 1 of this Article includes VAT and represents the maximum amount for one auction contract. The specific costs for each auction shall be determined based on the registration fee of the professional auction organization when registering to participate in organizing the auction of land use rights (in cases where there is no tendering process) or based on the tender results (in cases where tendering is conducted). The total payment for a successful auction contract shall not exceed 300 million VND. The selection of a professional auction organization shall be carried out in accordance with current laws on tendering and guidelines from competent state authorities.
3. In cases where the auction of land use rights is unsuccessful, the professional auction organization shall be reimbursed actual and reasonable expenses as stipulated at point b, Clause 1, Article 43 of Decree No. 17/2010/NĐ-CP dated March 4, 2010 of the Government on the sale of assets through public auction, but such reimbursement shall not exceed the auction fee in cases where the auction is successful.
4. In cases where an auction contract includes multiple plots of land and only part of the auction is unsuccessful, the ratio of successful auction (%) and unsuccessful auction (%) based on the starting price must be determined to calculate the fee payable to the professional auction organization according to the provisions of Clause 2 and Clause 3 of this Article.
5. The auction service fee for the sale of assets paid to the professional auction organization shall be determined in the settlement agreement of the asset auction sale contract.
Article 14. Preparation of budget estimates, use, and settlement of auction fees for land use rights
1. The Department of Finance (for costs related to determining the starting price), the agency entrusted with handling the auction of land use rights (for other costs) shall base their preparation of the budget estimate for land use rights auctions on the levels of revenue, expenditure items, and cost levels stipulated in Articles 9, 10, 11, 12, and 13 of this Circular, and the anticipated workload, and submit it for approval by the Chairman of the People's Committee with appropriate authority.
2. The Department of Finance and the agency entrusted with handling the auction of land use rights shall be responsible for managing and using the auction fees for land use rights in accordance with the law.
3. The Department of Finance and the agency entrusted with handling the auction of land use rights shall be responsible for reporting the settlement of the budget for land use rights auctions in accordance with the law on the management and use of state budget funds.
Article 15. Management of the advance payment of persons registering to participate in the auction of land use rights
Clause 1. Professional auction organizations, Land Use Rights Auction Councils shall only collect the advance payment from persons registering to participate in the auction of land use rights within a maximum period of four working days prior to the date of the auction session.
Clause 2. Professional auction organizations, Land Use Rights Auction Councils must immediately refund the entire advance payment to those who did not win the auction right after the auction session ends, at the latest within two working days from the end of the auction session, and remit the advance payment of the successful bidder to the state budget within two working days from the date of receiving the decision approving the auction results from the competent state agency.
Clause 3. During the retention period of the advance payment, professional auction organizations or Land Use Rights Auction Councils are responsible for safely preserving the advance payment.
Depending on specific conditions, professional auction organizations apply preservation methods: retaining at the auction organization, in the transaction account of the auction organization at the bank, or depositing with the State Treasury. The Land Use Rights Auction Council applies preservation measures: retaining at the permanent office of the Council or depositing with the State Treasury.
In case the advance payment is retained in the transaction account of the auction organization at the bank, any interest generated (if any) and transaction fees payable to the bank related to the advance payment shall be managed and used according to the financial mechanism applicable to public service units (for Property Auction Service Centers) or the financial mechanism applicable to enterprises (for property auction enterprises).
Article 16. Payment of proceeds from the auction of land use rights
Organizations and individuals winning the auction of land use rights for transfer with payment or lease with payment are responsible for paying the auction proceeds into the state budget in accordance with the provisions of laws on land use fee collection and land lease fee collection.
Chapter V
IMPLEMENTATION
Article 17. Implementation Organization
Clause 1. This Circular takes effect from May 1, 2012.
Clause 2. During the implementation process, if there are any difficulties, organizations and individuals are requested to promptly report to the Ministry of Finance for coordination in resolution./.
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