The new Land Law (the 2013 Land Law) provides land price in Section 2 of Chapter VIII, from Articles 112 to 116.
Under the Law, the State decides on land prices through the prescription of land price frames and tables, and decides on specific land prices.
Land valuation must comply with the principles established in Article 112. Accordingly, land valuation must comply with the lawful land use purpose at the time of land valuation and with the land use term, and conform with the popular market price of transferred land with the same land use purpose, or winning price in auctions of land use rights in case of organizing auctions of land use rights, or the income earned from land use. Adjacent land parcels with the same land use purpose, profitability and income earned from land use at a time must have the same price.
Land price frames and tables
Land price frames must be promulgated once every five years. The Government will promulgate land price frames and adjust them when the popular market price increases 20% or more over the maximum price or decreases 20% or more below the minimum price prescribed in the land price frame.
Under the new Land Law, land price tables must be promulgated once every five years and publicized on January 1 of the first year in a five-year cycle, instead of being promulgated every year and publicized on January 1 under the 2003 Land Law. Provincial-level People’s Committees will develop and submit land price tables to provincial-level People’s Councils for consideration before promulgation. The land price table will be used in the following six cases:
(1) Calculation of land use levy when the State recognizes land use rights of households or individuals for land areas within land use quotas, or when it permits the use purpose change from agricultural land or non-agricultural, non-residential land to residential land for land areas within land allocation quotas applied to households or individuals;
(2) Calculation of land use tax;
(3) Calculation of charges and fees in land management and use;
(4) Calculation of fines for administrative violations related to land;
(5) Calculation of indemnification paid to the State for damage cause in land management and use; and
(6) Valuation of land use rights paid to people who voluntarily return land to the State, if the returned land is allocated with land use levy, recognized of land use rights with land use levy, or leased land with full one-off rental payment for the entire lease term.
Specific land prices
Specific land prices will be decided by provincial-level People’s Committees. The determination of specific land prices must be based on the investigation, collection of information about land parcels, market land price and information on land price in the land database, and employ suitable valuation methods. Consultancy organizations may be hired to advise on the determination of specific land prices.
Specific land prices will be used in the following five cases:
(1) Calculation of land use levy when the State recognizes land use rights of households or individuals for land areas in excess of land use quotas, or permits the use purpose change from agricultural land or non-agricultural, non-residential land to residential land for land areas in excess of land allocation quotas applied to households or individuals; and determination of land rental for agricultural land areas in excess of land allocation quotas or quotas for receipt of transferred agricultural land use rights of households or individuals;
(2) Calculation of land use levy when the State allocates land with land use levy without auction of land use rights, recognizes land use rights, or permits the use purpose change for organizations with land use levy payment;
(3) Calculation of land rental if the State leases land without auction of land use rights;
(4) Valuation of land use rights upon equitization of state enterprises that are allocated land with land use levy, leased land with full one-off rental payment; and calculation of land rental, if equitized enterprises are leased land by the State with annual rental payment; and
(5) Calculation of compensation amount upon land recovery by the State.
Compared to the 2003 Land Law, the 2013 version adds provisions on land price determination consultancy. Accordingly, land prices determined by consultants will serve as one of the bases for competent state agencies to prescribe or decide on land prices.
On May 15, the Government issued Decree No. 44/2014/ND-CP providing methods of land valuation, the formulation and revision of land price frames and tables, specific land prices, and consultancy on land price determination. This Decree and the 2013 Land Law will take effect next month.-
