Increasing land auction deposit up to 50%: Solution to prevent 'deposit abandonment'?

(Chinhphu.vn) - Raising the deposit to 20%-50% is reasonable, can limit consequences, ensure reasonableness, and prevent "deposit abandonment" when auctioning land. However, many delegates said that the drafting agency needs to review the regulations on compensation for damages to ensure feasibility.

Deputy Minister of Justice Nguyen Thanh Tu chaired the meeting. Photo: VGP/DA

On October 21, Deputy Minister of Justice Nguyen Thanh Tu chaired the Council for Appraisal of the draft Resolution of the Government regulating the handling of difficulties and problems in auctioning land use rights in cases of land allocation and land lease according to the provisions of the Land Law.

According to the Submission, the draft Resolution amends and supplements the regulation on raising the deposit amount in the case of land allocation and land lease according to the provisions of the Land Law to limit the situation where participants in the land use rights auction take advantage of the too low deposit amount to participate in the auction for profit. The draft stipulates in the direction of raising the deposit amount in the case of land allocation and land lease for individuals and in the case of land allocation for investment project implementation to a minimum of 20% and a maximum of 50% of the starting price.

The Draft Resolution also stipulates handling of violations against auction winners in cases where land allocation or land lease violates the obligation to pay the auction winning price, leading to the decision to recognize the auction results being canceled.

Accordingly, the auction winner who forfeits the deposit must compensate for all damages arising from the organization of the auction (auction service price, auction organization costs) due to the cancellation of the auction results of land use rights to ensure compliance with the regulations on compensation for damages due to breach of obligations. This is to limit the situation of taking advantage of property auction activities for personal gain, and at the same time, increase the responsibility of the auction winner of land use rights.

In addition, the draft Resolution adds a provision prohibiting individuals from participating in land use rights auctions after winning the auction and forfeiting their deposits for a period of 6 months to 5 years. At the same time, to ensure strictness, feasibility, and suitability to the reality of each case, the draft stipulates a specific ban period for each violation.

Specifically, auction winners will be banned from participating in auctions for 2-5 years if they do not pay the auction winning price; auction winners will be banned from participating in auctions for 6 months to 3 years if they do not pay the full auction winning price.

Meeting scene. Photo: VGP/DA

Need to reconsider regulations on compensation issues

Commenting at the Appraisal Council, a representative of the Ministry of Public Security said that the previous low deposit rate regulation could easily lead to market manipulation. Therefore, raising the deposit to 20%-50% is reasonable and can limit the consequences. Regarding the level of compensation for damages, this person suggested that the drafting agency reconsider and only stipulate an open regulation; at the same time, there should not be a regulation prohibiting auction winners from participating in the auction for a long time but abandoning the deposit.

The representative of the Ministry of National Defense said that raising the deposit from 20% - 50% is too broad and should be kept shorter because raising the deposit as above will limit access for small businesses. On the contrary, for large businesses, this increase does not make them afraid. "Will raising the deposit like this really solve the problem of the "blue army and red army" situation?", he asked.

Regarding compensation for damages, the representative of the Ministry of National Defense said that the draft Resolution has general provisions and needs to be more specific; at the same time, consider removing the provision prohibiting participation in bidding for auction winners who return their deposits because it is not suitable.

The representative of the Ministry of Finance said that the draft Resolution has sufficient basis, is practical and very necessary. Commenting on the regulation of raising the deposit level to 50%, this person said that only the above framework level should be regulated, and the specific level should be decided by local authorities to suit the reality; compensation for damages should not be regulated; it is recommended to consider the case of deposit cancellation for the second time or more or have higher sanctions.

Concluding the meeting of the Appraisal Council, Deputy Minister of Justice Nguyen Thanh Tu assessed that the draft Resolution is very necessary to implement the direction of competent authorities and to limit cases of manipulation and abuse in land use rights auctions that have arisen in practice, and to overcome shortcomings and difficulties. The draft Resolution is also consistent with policies and guidelines; ensuring constitutionality, legality, and consistency...

Regarding the scope of regulation, Deputy Minister of Justice Nguyen Thanh Tu requested that the drafting agency must accept and explain to complete and ensure clarity. Regarding the criteria, principles, plans, and procedures for handling difficulties and problems, the Deputy Minister requested to continue reviewing and completing. Specifically, it is necessary to affirm the criteria according to Clause 3, Article 2, Resolution 206/2025/QH15 dated June 24, 2025 of the National Assembly on the special mechanism for handling difficulties and problems due to legal regulations, that is, there are regulations but they do not meet the requirements arising in practice...

Regarding the issue of human rights and civil rights, Deputy Minister Nguyen Thanh Tu suggested that consideration should be given to not regulating the issue of prohibition in the draft Resolution in Clause 2, Article 3. This content can be explained in the Submission or included in the amendment of the Law on Property Auction in the near future.

Regarding feasibility, it is recommended to reconsider the compensation regulations as suggested by some Council members. Therefore, the Deputy Minister suggested adding regulations to create flexibility for localities in the auction plan to handle the problems...

Dieu Anh

Source: https://baochinhphu.vn/tang-muc-dat-coc-dau-gia-dat-len-toi-50-giai-phap-de-chan-bo-coc-102251021163357038.htm