ChatToday: Land auctions are high but deposits are being forfeited en masse; how can this be prevented?

Lawyer shares measures to prevent mass abandonment of land auction deposits ( Video : Pham Tien).

Recently, the results of land auctions in the outskirts of Hanoi have shocked many people. Specifically, in Hoai Duc district (Hanoi), the winning bids for 19 land plots in Tien Yen commune ranged from 91 to 133 million VND/m2, 12.5 to 18 times higher than the starting price.

In Thanh Oai district, the winning bids for 68 plots of land in Thanh Cao commune ranged from 51-100 million VND/m2, 5-8 times higher than the starting price. These winning bids from the two auctions were significantly higher than the surrounding land prices.

Immediately after the auction, most of the land plots were resold at inflated prices, ranging from 400 to 600 million VND. Furthermore, land prices in the surrounding area were also instantly pushed up by 5-10 million VND/m2.

Recently, at an auction of 68 land plots in Thanh Oai district, 55 plots were forfeited, including the highest-priced plot at over 100 million VND/m2. Of the 13 plots for which full payment was received, the highest price was 55 million VND/m2.

In an interview with ChatToday on October 1st, lawyer Truong Anh Tuan, a real estate legal expert, stated that the phenomenon of large groups of speculators manipulating land auctions requires the intervention of relevant authorities to determine the cause.

However, from an economic perspective, most participants in recent auctions were motivated by profit. Initially, they believed that simply winning a few prime plots of land would allow them to resell for profit. But later, after weighing the economic implications, they realized that the high prices would make it difficult to profit, so they abandoned their bids en masse.

According to Mr. Tuan, land auctions are currently just civil transactions. Before the auction takes place, participants must deposit a security deposit. If a participant wins but fails to deposit, they will lose their deposit, which is already a form of penalty.

Regarding Hanoi's requirement to publicly disclose the identities of those who bid high on land but forfeited their deposits, Mr. Tuan believes it aims to create psychological pressure. This would make those who forfeit their deposits feel embarrassed and prevent them from repeating similar actions.

To prevent high-priced bids from being abandoned after the deposit is forfeited, Mr. Tuan suggested that regulations prohibiting participation in auctions in a specific area for a certain period of time are necessary. He argued that those who abandon their deposits demonstrate a lack of civil responsibility and this could be repeated in future instances.

In addition, he suggested that a mechanism for taxing real estate based on the time of transfer should be established soon. For example, those who win an auction but transfer ownership immediately should be taxed at a higher rate based on the state-determined price.

Furthermore, he believes that a tax mechanism targeting those who acquire and own large amounts of land but do not use it for economic development is necessary.

ChatToday is a talk show featuring individuals discussing economic issues. This product was conceived and implemented by members of the Economic Department of Dan Tri Newspaper.

Appearing on Dan Tri newspaper and its social media platforms at 9 AM on the 1st and 16th of each month, ChatToday brings you stories from guest speakers or their perspectives and viewpoints on an economic topic of interest to readers.

Video: Video: Pham Tien

Source: https://dantri.com.vn/bat-dong-san/chattoday-dau-gia-dat-cao-nhung-o-at-bo-coc-ngan-chan-bang-cach-nao-20241001005804715.htm