At the same time, it adds a rule prohibiting winning bidders who forfeit their deposits from participating in auctions for six months to five years.

Deputy Minister of Justice Nguyen Thanh Tu on October 21 chaired the Appraisal Council meeting which discussed the draft Resolution addressing obstacles in land-use right auctions for land allocation or lease under the Land Law.

The draft says land-use rights auctions still face shortcomings, such as abnormally high bidding prices, signs of collusion, price manipulation, and cases of exploiting auctions for profit and then forfeiting deposits. 

These disrupt the healthy development of the real estate market and also negatively affect socio-economic stability and public order in some localities.

The draft resolution proposes raising the deposit requirement to a minimum of 20 percent and a maximum of 50 percent of the starting price. This aims to prevent bidders from exploiting low deposit levels for profiteering.

In some cases, bidders deliberately bid high prices to generate ‘land price fever’ in localities artificially. This allows them to sell their land at high prices.

It also includes sanctions for those who don’t pay after winning an auction, leading to cancellation of the recognized results.

Accordingly, successful bidders who forfeit their deposits must compensate for all related damages, such as auction service fees and organizational costs. This provision aligns with Article 361 of the Civil Code regarding damage compensation.

In addition, the draft adds a ban preventing individuals who forfeit deposits from participating in future land use rights auctions for a period ranging from 6 months to 5 years.

Specific ban durations are as follows: 2 to 5 years if the bidder fails to pay after winning; 6 months to 3 years if the payment is incomplete.

If approved, the resolution would take effect from the date of issuance until February 28, 2027.

However, concerns have been raised that such a proposal could infringe on human rights and basic civil rights.

In response, the Ministry of Justice (MOJ) stated that under the Civil Code, individuals or legal entities who abuse civil rights to commit unlawful acts may be denied legal protection and required to compensate for damages. Therefore, the sanctions of banning auction participation in the case of deposit forfeiture "should not be considered a restriction of civil or human rights."

Additionally, since land auctions are a method of asset transactions rather than a business field, the proposal does not restrict freedom of business as defined by the Constitution, according to the drafting agency.

Feedback, clarification and revision 

A representative from the Ministry of Public Security (MPS) stated that previously, low deposit rates made it easy for people to manipulate the market. Therefore, raising the deposit requirement to 20–50 percent is reasonable. Regarding compensation, the ministry suggested the regulation should not be overly rigid. It also opposed long bans on auction participation for those who forfeit deposits.

Meanwhile, a representative from the Ministry of National Defense (MND) argued that the 20–50 percent range is too broad and should be narrowed. The reasoning is that higher deposits could hinder access for small businesses, while larger firms would not be significantly affected.

The Ministry of Finance (MOF) stated that the 50 percent deposit should only be set as a cap, with specific rates decided by local authorities to reflect actual conditions.

Land auctions heated up from August 2024 to mid-2025 in the outskirts of Hanoi, then spread to several provinces.

Last year, during an auction of 19 land lots in Long Khuc hamlet, Tien Yen commune (former Hoai Duc district), one lot was bid up to over VND133 million/sqm, totaling VND15 billion, or 18 times higher than the starting price. Yet 8 out of 19 lots ended up with forfeited deposits.

In former Thanh Oai district, during an auction of 68 lots in Thanh Than hamlet, Thanh Cao commune, the highest price reached VND100 million/sqm, eight times the starting price. Still, 56 out of 68 successful bidders forfeited their deposits.

Similarly, in an auction held in former Ha Dong district in October 2024, as much as 80 percent of the lots had winning bids later forfeited.

Nguyen Le