Tighten discipline in land auctions.

VTV.vn - The proposal to increase the deposit amount to help prevent the exploitation of low deposit mechanisms for profit, leading to inflated prices, has received public support.

In Hanoi, a plot of land in the suburbs was once offered for 30 billion VND, 12,000 times the starting price. In Ho Chi Minh City, a plot of land over 1 hectare in Thu Thiem was once pushed up to over 1 billion USD, equivalent to 2.4 billion VND/m², before the bid was forfeited and the auction results canceled. Although these cases have been dealt with, the practice of bidding high prices and then forfeiting the deposit continues to recur, even showing signs of collusion, price manipulation, and market rigging. Land auctions – which were expected to be an effective tool for resource allocation – are being exploited for profit. In response to this situation, the Ministry of Justice has proposed two solutions: increasing the deposit amount from 20% to a maximum of 50% of the starting price; and requiring full compensation for damages and a ban from participating in auctions for 6 months to 5 years if the deposit is forfeited.

The proposal to raise the deposit amount to prevent exploitation of low deposit mechanisms for profit, leading to inflated prices, has received public support. However, opinions also suggest that a suitable deposit amount should be chosen. If the deposit amount is too high, it will reduce competitiveness and make it difficult for investors.

Mr. Pham Duc Toan, General Director of EZ Real Estate Joint Stock Company, said: "We must address this issue at its root, not setting an initial price, but aiming for a price close to the market price that investors are targeting. This will solve many problems. We can put down a 20% deposit, but the amount increases significantly, even up to 50%."

Regarding the proposal to require full compensation for damages when a deposit is forfeited, it is considered a strong deterrent, especially in large-scale auctions where organizational costs are substantial. This would encourage investors to be more serious and responsible, preventing them from treating auctions as a game of chance. However, additional regulations are needed to require proof of financial capacity from participants and to publicly disclose the identity of those who forfeit their deposits to ensure transparency.

Lawyer Pham Thanh Tuan from the Hanoi Bar Association stated: "The starting price should be truly appropriate, and there should be synchronized tools and measures. For example, we should consider applying a tax rate for those who own multiple houses and land plots, or a progressive tax in the case of real estate transfers, or regulations on transparency of land market information, or regulations related to the declaration of real estate-related information. In our opinion, these tools, when used synchronously, will create effectiveness in land auctions in the future."

Lawyer Nguyen Thanh Ha - Chairman of SBLAW law firm, commented: "For example, if you win the auction for land use rights in area A, and within one year or six months you transfer the land to someone else to speculate and make a profit, you can use a tool to increase the transfer tax. Or, another tool is to impose a high tax if the person who won the land auction already has land use rights but does not use them."

Completing the legal framework, tightening regulations, increasing penalties, and controlling the financial capacity and transparency of participants are prerequisites for bringing land auctions back on track – where the interests of the State, investors, and the people are harmoniously ensured. Along with tightening land auction regulations, the Government and relevant agencies have implemented many solutions to stabilize the real estate market in recent times, such as controlling capital flows and inspecting and handling projects with delayed progress.

Source: https://vtv.vn/siet-ky-cuong-dau-gia-dat-100251110144619559.htm