“Ministry of Natural Resources and Environment Cracks Down on Chaotic Land Auction Practices”

The Ministry of Natural Resources and Environment has issued a document to the People’s Committees of provinces and cities regarding the adjustment, amendment, and supplementation of land prices in accordance with the Law on Land.

According to the ministry, in implementation of the Land Law 2024 and Decree No. 71/2024/ND-CP dated June 27, 2024, of the Government regulating land prices, the Ministry of Natural Resources and Environment has issued Official Dispatch No. 5317/BTNMT-QHPTTND dated August 8, 2024, to the People’s Committees of provinces and cities, requesting their continued proactive and urgent completion of the construction and issuance of regulations on land prices within their competence.

The Land Law 2024 stipulates in detail the cases of applying the land price list (Clause 1, Article 159) towards expanding the cases of applying the land price list compared to the Land Law 2013, in the context of synchronizing regulations, such as the land valuation methods based on market principles to build the land price list (Article 158). The land price list issued by the Provincial People’s Committee according to the provisions of the Land Law 2024 will continue to be applied until December 31, 2025. If necessary, the Provincial People’s Committee shall decide to adjust the land price list according to the provisions of this Law to suit the actual situation of land prices in the locality (Clause 1, Article 257). The Provincial People’s Committee shall construct and present the land price list to the Provincial People’s Council for the first time for promulgation and application from January 1, 2026.

Annually, the Provincial People’s Committee shall have the responsibility to present to the Provincial People’s Council for a decision on adjusting, amending, and supplementing the land price list for promulgation and application from January 1 of the following year. If necessary, the Provincial People’s Committee shall present to the Provincial People’s Council for a decision on adjusting, amending, and supplementing the land price list within the year (Clause 3, Article 159).

The Ministry of Natural Resources and Environment stated that, according to its grasp of the situation, some localities are using the land prices in the current land price list (constructed and issued according to the provisions of the Land Law 2013 and guiding documents) as the starting price for land-use right auctions when the State allocates or leases land in cases where the land lot has been invested with technical infrastructure in accordance with the detailed construction planning prescribed at Point i, Clause 1, Article 159 of the Land Law 2024, and there is a huge gap between the starting price and the winning auction price, potentially leading to the exploitation of land-use right auctions for profit, causing market disruption, and affecting socio-economic development, the business and investment environment, and the housing and real estate market.

This situation occurs partly due to the current land price list, which was constructed and issued according to the provisions of the Land Law 2013 and guiding documents, being constrained by the Government’s land price framework (which has been removed in the Land Law 2024). In addition, during the implementation of the land price list, some localities have not promptly monitored land price fluctuations in the market to adjust the list accordingly. As a result, land prices in the list in some localities are still much lower than market prices.

To enhance the effectiveness of land management and promote a healthy real estate market, thereby fostering socio-economic development, the Ministry of Natural Resources and Environment requested the People’s Committees of provinces and cities to direct the review of land prices in the land price list when applying them to land management. If the land prices in a certain area or position are found to be inappropriate, they should base their decision on the provisions of the law and the actual situation of that locality to adjust the land price list issued by the Provincial People’s Committee according to the provisions of the Land Law 2013 for that particular area or position, for application until December 31, 2025. The procedure for adjusting the land price list shall be implemented according to Article 17 of Decree No. 71/2024/ND-CP.

At the same time, they should direct agencies and functional units to inspect and supervise land-use right auction activities in their respective localities to ensure compliance with the law, transparency, and publicity. Any violations of the law in land-use right auctions must be promptly detected and strictly handled to prevent the exploitation of land-use right auctions for profit and market disruption, in accordance with the Prime Minister’s directions in Official Telegram No. 82/CD-TTg dated August 21, 2024, on rectifying land-use right auctions.