HCMC – Individuals or organizations that win land auctions but fail to make payment or forfeit their deposits may be barred from participating in future auctions for up to five years, according to a new proposal by the Ministry of Justice.
The proposal, part of a draft Government resolution aimed at addressing problems in land-use right auctions, sets stricter penalties for those who default after winning bids.
Under the draft, winners who fail to pay in full as required would have their auction results canceled, lose their deposits, and be required to compensate for auction-related costs.
Those who intentionally refuse to pay or withdraw their deposits would face a ban from land auctions for two to five years. If the payment is only partially made, the ban would range from six months to three years.
The authority responsible for approving auction results would issue the ban within 10 days of canceling the result. The list of banned individuals and organizations would be publicly disclosed on the National Property Auction Portal.
The draft also proposes raising the deposit requirement for land auctions to between 20% and 50% of the starting price—three times higher than the current maximum rate.
Under the existing Law on Property Auctions, individual participants must place deposits of 5% to 20% of the starting price, while organizations are required to deposit 10% to 20%.
Experts say the higher deposit rates and stricter penalties are necessary to curb speculative practices and artificial price inflation in the property market.
In recent months, several land auctions in Hanoi City’s suburban areas, such as Thanh Cao, Tien Yen, and Soc Son, have seen bidding prices surge to over VND100 million per square meter, sparking short-lived speculative land fever and market disruptions.
Small-scale auctions, involving dozens of plots, have been particularly vulnerable to price manipulation by speculators, distorting local land values and disrupting market transparency.
