Vietnam: New guidance on determination of value of land use rights

Recently, the Ministry of Finance of Vietnam issued Circular No. 80/2017/TT-BTC on guidelines for determining value of land use rights, land rental and property pertaining to land refunded when the State expropriates land and management and use of compensation for property allocated by the State, and support costs when the State expropriates land without compensation for land.

According to Circular No. 80/2017/TT-BTC, provincial People's Committees shall consider each circumstance to make a decision on returning the remaining value of property pertaining to land to land users having their land expropriated due to violations against regulations on land mentioned in Points c and g Clause 1 Article 64 of the Land Law.

The determination of the remaining value of property pertaining to land to return to property owners mentioned in Clause 1 this Article shall be carried out from the time the State expropriates land. The remaining value of property pertaining to land stated in Clause 2 this Article means the total remaining value of each piece of property pertaining to land.

In which, the remaining value of plants or domestic animals shall be equivalent to the compensation for plants and animals specified in Article 90 of the Land Law. The remaining value of houses, buildings or other construction works pertaining to land shall be determined as follows:

Remaining value of the construction work pertaining to land = Rate (%) of the remaining quality of the construction work pertaining to land x New construction price of the construction work pertaining to land.

If the construction work pertaining to land is expropriated partially and the remainder is not longer used, the value of refund shall be equivalent to the remaining value of the entire construction work pertaining to land; if the construction work pertaining to land is expropriated partially but the remainder is still available to use, the value of refund shall be equivalent to the value of the construction work pertaining to land expropriated and costs of repairing and completing the remainder under corresponding specifications of the construction work pertaining to land before it is demolished.

In the case where the construction work pertaining to land fails to meet requirements for specifications issued by ministries in charge or has not included in specific regulations of local authority, the provincial People’s Committee shall assign a relevant law enforcement authority to determine the remaining value of the construction work pertaining to land in accordance with regulations of law and actual conditions of the province. Expropriated land (including property pertaining to land) shall be allocated or leased out in the form of auction under regulations of law on land.

The initial bid shall include the value of land use rights and land rental determined according to regulations of law on collection of land levy, land rental and water surface rental and the remaining value of the property pertaining to land stated in Clause 3 and Clause 4 this Article.

The proceeds earned from the auction after deducting costs related to the auction shall be used to refund the remaining value of the property pertaining to land mentioned in Clause 3 and Clause 4 this Article to the property owner; transfer to the state budget under regulations of law on state budget for the remaining amount of proceeds.

If expropriated land is allocated or leased out in the form of an auction stated in Clause 2 Article 118 of the Land Law, apart from the payment for land levy or land rental specified in regulations of law on collection of land levy, land rental and water surface rental, the land recipient and land lessor shall refund the remaining value of the property pertaining to land stated in Clause 3 and Clause 4 this Article to the property owner from the day on which the State allocates or leases out land to the land recipient and land lessor.

Circular No. 80/2017/TT-BTC of the Ministry of Finance of Vietnam takes effect from September 15, 2017.

Source: Thoi bao Tai chinh Viet Nam Online

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