Circular No. 69-TC/DT guiding the collection and use of funds from the sale of state-owned housing to tenants.

CIRCULAR

ISSUED BY THE MINISTRY OF FINANCE NUMBER 69-TC/ĐT ON AUGUST 17, 1994

GUIDELINES FOR THE COLLECTION AND USE OF FUNDS FROM THE SALE OF STATE-OWNED HOUSING TO CURRENT LESSEES

Pursuant to Decree No. 61-CP dated July 5, 1994 of the Government on the sale and business operations of housing, the Ministry of Finance provides guidance for the implementation of the collection, submission, and use of funds from the sale of state-owned housing to current lessees as follows:

This technical regulation sets out technical requirements, testing methods, sampling procedures; management requirements; responsibilities of organizations and individuals producing, trading, and importing cigarettes.

1. The transfer of state-owned housing managed by administrative agencies, armed forces, people's organizations, political and social organizations, and state-owned enterprises must be carried out according to the asset handover system and capital transfer regulations currently in force, ensuring the preservation of capital.

2. Directors of provincial housing trading companies, Chairmen or Vice Chairmen of People's Committees at cities under provinces, districts, and counties where there are no housing trading companies (hereinafter referred to as the seller of housing), who are currently managing or have been assigned to manage state-owned housing funds (as mentioned in Point 2, Article 8, Decree No. 61-CP), when selling state-owned housing must implement the collection and submission of sale proceeds according to the provisions of this Circular.

3. The person eligible to purchase state-owned housing is a current tenant of state-owned housing.

4. The sale price of state-owned housing is determined based on:

- The decision to sell state-owned housing issued by the Chairman of the People's Committee of centrally governed cities and provinces.

- The housing purchase and sale contract signed by both parties.

The sale price includes: the price of the house (based on its remaining value) and the land price when transferring the right to use.

5. The state-owned housing fund sold to current tenants includes:

- Housing constructed with State Bank funds (central and local) through new construction and management by local real estate sectors; direct investment in administrative agencies, armed forces, Party organizations, mass organizations (collectively referred to as public service economic units) for distribution to employees; new construction for state-owned enterprise employees; purchasing housing for distribution to employees.

- Housing created using funds from administrative agencies, public service economic units, and state-owned enterprises originating from state budget funds.

- Housing with other ownership origins that have been transferred to state ownership.

- Housing built with state budget funds and a portion of individual or organizational contributions.

6. Sellers of housing and those transferring housing (mentioned in Point 2, Article 8, Decree No. 61-CP) must coordinate with the directly responsible financial management agency to monitor and confirm the housing fund, land usage, housing capital, and land capital during the sale and transfer of housing according to the current fixed asset management and land management systems.

7. All proceeds from the sale of state-owned housing must be submitted to the state budget through the State Treasury. Proceeds from the sale of state-owned housing include: the sale price of the house, the land price when transferring the right to use, and fines imposed on buyers for breach of contract.

8. Preferential policies for housing and land for individuals with meritorious service shall be implemented according to the policy for individuals with meritorious service.

II. COLLECTION OF FUNDS FROM THE SALE OF STATE-OWNED HOUSING

1. Payment for Purchased Housing.

a) The seller of housing bases the receipt of sale proceeds (invoice for payment according to the Ministry of Finance's regulations) on the housing purchase and sale contract signed with the buyer. Depending on the payment method stipulated in the housing purchase and sale contract, the receipt of sale proceeds will reflect the following payment terms:

- If payment is made in full after signing the contract, a 10% discount on the sale price is granted.

- If payment is made within one year, the initial payment immediately after signing the contract must not be less than 20% of the total amount payable, with a 2% discount on the sale price.

- If payments are made in installments but the payment period does not exceed ten years, the initial payment after signing the contract must not be less than 20% of the total amount payable; each subsequent annual payment must not be less than 8% of the total amount payable.

- The remaining amount is converted into 98% gold as the basis for subsequent payments. The quantity of gold for each subsequent payment is converted into Vietnamese Dong (VND) and 98% gold according to the selling price of the State Bank of Vietnam (VND) and the exchange rate between Vietnamese Dong and 98% gold set by the State Bank of Vietnam (state-owned precious metals company in the locality) at the time of payment.

Example: The housing purchase and sale contract between Mr. Nguyen Van A (buyer) and Provincial Housing Trading Company N (seller) is for 81,000,000 VND, including: House purchase price: 20,000,000 VND; Land price when transferring the right to use: 61,000,000 VND.

The payment period for the purchase of housing is ten years. The initial payment after signing the contract must be 20% of the contract value. Subsequent annual payments must not be less than 8% of the total amount payable.

Mr. A must pay for the purchase of housing as follows:

+ First payment:

81,000,000 VND x 20% = 16,200,000 VND.

The remaining amount is: 64,800,000 VND, which is converted into 98% gold at the time of sale at a price of 480,000 VND per tael of gold. Thus, the quantity of gold converted is: 64,800,000 VND ÷ 480,000 VND = 135 taels of gold, over the remaining nine years, the buyer must pay each subsequent installment as follows:

135 taels of gold ÷ 9 = 15 taels of gold.

+ Second payment (second year) at a price of 98% gold of 500,000 VND per tael, the buyer pays:

15 taels of gold x 500,000 VND per tael = 7,500,000 VND

+ Third payment (third year) at a price of 98% gold of 450,000 VND per tael, the buyer must pay:

15 taels of gold x 450,000 VND = 6,750,000 VND, thus, the remaining quantity of gold after two subsequent payments is 135 taels - 30 taels = 105 taels of gold.

Subsequent payments from the fourth to ninth installments (excluding the first payment) are calculated similarly until the initial quantity of gold converted (135 taels of gold) is fully paid.

b) Payment of a fine equal to 5% of the value of the house purchase contract shall be made by the buyer in cases where the buyer violates the contract without a legitimate reason, such as when the buyer has not fully paid for the house upon the expiration of the contract term; or when the buyer fails to pay the purchase price according to the payment schedule stipulated in the contract.

2. Collection of money from the sale of houses:

a) The seller of houses is the Directors of provincial and centrally-administered city housing companies. In cases where the seller is the Chairman or Vice-Chairman of the People's Committee of a province-level city, district, or county, the Land Management Office at those levels shall carry out the sale of houses. The seller is responsible for guiding, monitoring, and urging the implementation process until the completion of all house purchase contracts, including:

+ Preparing a payment receipt for the purchase of houses in three copies: one copy retained by the seller, one copy transferred to the State Treasury to collect money, and one copy given to the buyer for tracking;

+ Maintaining records to monitor the execution of purchase contracts, methods of payment for house sales, breach of contract fines, and other related transactions;

+ Keeping files and transaction documents for house purchases: contracts, payment receipts for house purchases, invoices for collected payments, etc., for each house purchase case;

+ Preparing a contract termination record for house purchase contracts.

b) The buyer is responsible for:

+ Fully and correctly implementing all contents of the house purchase contract;

+ Paying the house purchase price at the state treasury office within the area;

+ Retaining relevant documents and texts related to the house purchase.

c) The State Treasury Office is responsible for:

+ Collecting money based on the payment receipt for the purchase of houses prepared by the seller, issuing invoices for the collection of money to be remitted to the State Budget. The payment receipt is made in three copies: one copy retained by the State Treasury; one copy transferred to the seller for retention; and one copy given to the buyer.

+ Maintaining records to monitor the collection of money from house sales for each case;

+ Tracking other related transactions concerning house purchases.

For houses under state ownership with a portion contributed by individuals or organizations, the seller only sells the value of the house under state ownership after deducting the value of the house contributed by the individual or organization. The buyer must pay the selling price of the house under state ownership and land transfer fees. The method of collecting and paying money for house purchases and sales is as stated above.

3. Money from the sale of houses under state ownership remitted to the State Budget shall be implemented according to Circular No. 68 TC/NSNN dated August 15, 1994, issued by the Ministry of Finance regarding guidance for supplementing and amending the current budget catalog.

4. Reporting and accounting system:

The seller of houses under state ownership must fully implement the reporting and accounting-statistical system according to the current state financial management regulations, regularly reporting the results of the house sale program to the Chairman of the Provincial People's Committee, centrally-administered city, and simultaneously sending it to the Ministry of Construction.

The State Treasury Office is responsible for organizing the accounting of money received from house sales, reporting to higher-level State Treasuries and peer-level finance departments about the situation of money received from the sale of houses under state ownership. The State Treasury Bureau will compile reports to the Ministry of Finance.

Money from the sale of houses under state ownership remitted to the State Budget shall be recorded in the corresponding Chapter, Type, Clause, and Category of the current budget catalog under the item "Revenue from the sale of houses under state ownership and land transfer fees."

III. USE OF MONEY FROM THE SALE OF HOUSES UNDER STATE OWNERSHIP

Money from the sale of houses under state ownership shall be invested in building and supporting the development of the housing fund according to Article 11 of Decree No. 61-CP dated July 5, 1994, of the Government (hereinafter referred to as building and supporting the development of the housing fund).

1. Formulating and implementing plans for developing the housing fund:

a) Based on the house sale plan approved by the Chairman of the Provincial People's Committee, the seller prepares a plan to collect money from house sales. The revenue from the sale of houses under state ownership is reflected in the annual provincial or centrally-administered city budget revenue plan.

b) Based on the determined revenue plan, the Provincial People's Committee directs relevant agencies to formulate a construction and support plan for the housing fund for the year that is appropriate.

The construction and support plan for the housing fund includes the following contents:

b.1. Plan for constructing and renovating high-rise houses or converting fourth-grade residential areas into high-rise houses for sale. After completion, this type of house is handed over to the local housing sales council to establish a house sale plan according to Point 3, Article 8 of Decree No. 61-CP dated July 5, 1994, of the Government.

Houses for sale are prioritized for households currently residing in houses as stipulated in Clauses 1, 2, and 3 of Article 5 of Decree No. 61-CP dated July 5, 1994, of the Government. The selling price of this type of house includes:

+ The house price according to the final settlement handover, plus the allocated infrastructure cost (if applicable).

+ The land transfer fee determined according to Point 2, Article 7 of Decree No. 61-CP dated July 5, 1994, of the Government.

In cases where these houses are sold to those without houses or with overcrowded living conditions, the selling price includes:

+ The agreed-upon house price recorded in the lease contract (plus allocated infrastructure costs if applicable).

+ The current land transfer fee of the locality and the framework price set by the state.

The collection of money from the sale of houses under this category is carried out as stated in Section II above.

b.2. Plan for constructing and renovating high-rise houses or converting fourth-grade residential areas into high-rise houses for rental. Upon completion, this type of house is handed over to the housing management and business agency.

The rental of houses by housing business companies is prioritized for the groups listed in Points 1, 2, and 3 of Article 5 of Decree No. 61-CP dated July 5, 1994, of the Government. Housing management and business agencies implement rental and management of houses according to the current state management and rental regulations.

Those without houses or with overcrowded living conditions are rented houses by the housing management and business agency at agreed-upon prices recorded in the lease contract.

The local financial authority shall guide the determination and accounting of the capital sources for units transferring housing to the housing business management agency in accordance with the current state asset management regime and financial management system.

b.3. Plan for constructing infrastructure in areas that have been planned for housing construction. The Chairman of the Provincial People's Committee assigns competent agencies to establish and implement this plan. Once the infrastructure is completed, the final settlement value of the infrastructure area will be allocated to the housing constructed on that infrastructure area.

The housing business management unit assigned by the Provincial People's Committee to implement the housing construction plan for sale or lease must accept and preserve the transferred infrastructure capital and the land price when transferring usage rights as the basis for determining the future housing sales price.

b.4. Plan to improve residential areas where living conditions are extremely poor, including the following contents:

- Improving internal traffic;

- Improving water supply;

- Improving drainage;

- Constructing and installing public lighting.

These works shall be carried out on the principle of joint effort between the State and the people. Depending on the specific conditions of each area, the Provincial People's Committee may decide to support part of the capital from the state-owned housing sales fund for this plan, but not exceeding 50% of the approved budget for these works.

b.5. Social policy implementation plan regarding housing includes the following two cases:

- Housing for families of martyrs who are alone and without support.

- Housing for those who have contributed to the revolution.

b.5.1. In the case of new housing construction according to planning, the capital plan includes: Construction costs, land transfer fees, and other related expenses.

b.5.2. In the case of providing subsidies to individuals entitled to such policies, the Provincial People's Committee assigns competent agencies to develop funding plans for each specific case.

Units assigned by the Provincial People's Committee to establish and implement housing construction and support plans must prepare plans in accordance with regulations and deadlines set by the Provincial People's Committee and submit them to the Science Committee, Department of Finance and Price, city for consolidation and balance reporting to the Chairman of the Provincial People's Committee for consideration and submission to the same-level People's Council for approval.

c) Plans for housing construction and development support funds under projects approved by the same-level People's Council are reflected in the annual investment construction plan of the province or centrally-administered city sent to the National Planning Commission, Ministry of Finance, and Ministry of Construction for consolidation and reporting to the Government.

d) Management and allocation of capital according to the housing construction and support plans approved by the Provincial People's Council and ratified by the Chairman of the Provincial People's Committee shall be implemented as follows:

- Plans mentioned in points b.1; b.2; b.3; b.5.1 shall be implemented in accordance with the current state capital investment construction management system.

- Plans mentioned in points b.4; b.5.2. Units assigned by the Chairman of the Provincial People's Committee to prepare budgets according to the level of support from the competent authority, the local financial authority shall review and submit to the Chairman of the People's Committee for approval. Management and allocation shall be carried out according to the approved budget.

2. Establishing a cost plan for selling houses.

a) Costs for the seller and the selling committee to carry out house sales, established by the seller in accordance with the current financial standard include the following main contents:

- Printing costs for materials serving the sale of houses, office supplies;

- Training costs;

- Operational guidance costs;

- Rent costs for working equipment of the selling committee;

- Costs for determining the residual value of houses;

- Costs for auditing, inspection, and re-inspection;

- Costs for meetings, reviews, and project evaluations;

- Other costs related to the activities of the selling committee.

b) The cost estimate for selling houses, prepared simultaneously with the establishment and implementation of the local housing development plan by the selling agency, shall be reviewed by the local financial authority and approved by the selling committee, then submitted to the Chairman of the Provincial People's Committee for approval. The cost plan for selling houses must be reflected in the provincial or city's annual budget expenditure plan, with the total estimated selling costs not exceeding 2% of the proceeds from the sale of state-owned houses.

c) Management and allocation of funds for selling houses shall be carried out by the local financial authority in accordance with the current state financial management system for public services.

For the time being, in the fourth quarter of 1994, the local financial authority shall advance the funds for selling houses. This amount will be reimbursed once there is revenue from the sale of houses.

IV. IMPLEMENTATION

1. The Provincial People's Committee directs the selling agency and relevant agencies to implement the sale of houses, collect rent, and manage and use the proceeds from the sale of state-owned houses for tenants in accordance with the guidelines set forth in this Circular.

2. The Provincial People's Committees report to the Prime Minister and send copies to the Ministry of Finance about the proceeds from the sale of houses and the use of proceeds from the sale of houses before the issuance of Decree No. 61-CP dated July 5, 1994, for consideration and resolution.

3. This Circular takes effect from July 5, 1994. Previous documents contrary to this Circular are no longer effective. During implementation, if there are difficulties, departments and localities are requested to promptly reflect them to the Ministry of Finance for study and resolution.