On October 21, Deputy Minister of Justice Nguyen Thanh Tu chaired the independent appraisal council for the draft Government Resolution addressing challenges and obstacles in land use rights auctions (referred to as land auctions) during land allocation and leasing as per the Land Law.
Representing the drafting agency, Mr. Le Van Tuan, Deputy Director of the Legal Aid Department (Ministry of Justice), presented the key content of the draft proposal and the draft Resolution.
 The Ministry of Justice proposes increasing the land auction deposit to 50%. Photo: Hoang Huy
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Recently, land auctions have seen participants bidding unusually high prices, with signs of collusion, price suppression, price manipulation, and exploitation of the auction process for profit, followed by deposit forfeiture.
To combat and severely address these negative practices in land use rights auctions, the Ministry of Justice has proposed two mechanisms to curb exploitative behaviors, including deposit forfeiture in land auctions.
First, amending and supplementing regulations to increase the deposit amount for land allocation and leasing to a minimum of 20% and a maximum of 50% of the starting price.
Currently, the 2016 Asset Auction Law sets the minimum deposit for land use rights auctions at 5% for residential land allocated to individuals and 10% for investment projects, with a maximum of 20%. The Ministry of Justice proposes raising this to a minimum of 20% and a maximum of 50%.
Second, establishing penalties for auction winners who forfeit their deposit or fail to fulfill payment obligations, leading to the cancellation of auction results.
The draft Resolution mandates that individuals forfeiting their land auction deposit must compensate for all damages arising from the auction’s organization (auction service fees, organizational costs) due to the cancellation of land use rights auction results.
Additionally, the draft Resolution introduces a ban on individuals participating in land use rights auctions for 6 months to 5 years if they forfeit their deposit after winning an auction.
To ensure precision, feasibility, and alignment with practical cases, the draft specifies ban durations for different violations. Specifically, a 2-5 year ban applies to auction winners who fail to pay the winning bid, and a 6-month to 3-year ban applies to those who pay an insufficient amount.
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At the appraisal council, a representative from the Ministry of Public Security noted that the previously low deposit rate facilitated market manipulation. Based on cases handled by the Ministry, increasing the deposit to 20-50% is reasonable and can mitigate negative consequences.
Regarding damage compensation, the Ministry of Public Security suggested avoiding rigid regulations and instead adopting a more flexible approach. They also recommended against long-term bans for auction winners who forfeit their deposit.
A representative from the Ministry of National Defense argued that the 20-50% deposit increase range is too broad and should be narrowed. Such an increase would limit access for small businesses, while large enterprises would remain unaffected.
On damage compensation, the Ministry of National Defense found the draft Resolution too vague and called for more specific provisions. They also suggested removing the ban on auction participation for deposit forfeiture, deeming it inappropriate.
Commenting on the 50% deposit increase, a representative from the Ministry of Finance suggested maintaining the 20-50% framework in the draft Resolution but allowing local authorities to determine specific rates based on local conditions.
Regarding damage compensation, the Ministry of Finance advised careful consideration. For the auction participation ban, they proposed applying it only to those who forfeit their deposit multiple times or imposing stricter penalties.
Concluding the appraisal council meeting, Deputy Minister of Justice Nguyen Thanh Tu emphasized the necessity of the draft Resolution to implement directives from higher authorities and curb manipulation and abuse in land use rights auctions observed in practice.
The draft Resolution aligns with policies and guidelines, ensuring constitutionality, legality, consistency, and national security and defense considerations.
Regarding the scope of application, Deputy Minister Nguyen Thanh Tu urged the drafting agency to refine and clarify the content. He also called for further review and improvement of criteria, principles, solutions, and procedures for addressing challenges and obstacles.
BUI TRANG
– 15:09 21/10/2025
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