On October 19, as the second session of the 16th National Assembly continued, lawmakers met in groups to discuss a draft amendment to the Law on Property Auctions.
Justice Minister Hoang Thanh Tung said the government proposed raising the advance payment to 20–50% of the starting price at auctions of land-use rights for residential plots allocated to individuals.
Concern over large companies taking over auctions
Nguyen Manh Hung, a lawmaker from Can Tho, supported adjusting the deposit to curb abandoned deposits, real-estate manipulation and artificial prices. He said the 20–50% range needed more consideration.
For a plot starting at VND 5 billion, the deposit would range from VND 1 billion to VND 2.5 billion. Hung said this was high and noted that a genuine buyer might need a bank loan, so the amount could limit participation, especially by people who need a home.
He said high-value property could come under the control of large, financially strong companies, leading to takeovers of auctions, monopolies and market manipulation.
He added that even a 50% advance payment would not eliminate violations related to abandoning a deal if the starting price were low.
Another risk concerns bank liquidity and frozen social capital. Large sums could remain in auction accounts throughout the process, reducing the efficiency of capital use.
Citing several countries, Hung proposed two types of land auction. For residential plots sold to individuals who genuinely need a home, he suggested 10–20%. For commercial land linked to large businesses, he proposed 20–30%.
He also proposed penalties for abandoning a deal, including a 2–5-year ban from land-use-right auctions, fines or suspension of operations.
Auction participants must prepare to buy
Responding to these concerns, Tung said the 20–50% advance payment was not new. It was set out in Government Resolution No. 66.11/2026/NQ-CP, and the draft law would codify it.
The measure is intended to curb abandoned deposits, artificial price increases and decreases, and their negative effect on overall real-estate prices. Tung said it had helped control these practices during its first nine months.
He acknowledged that a high deposit could limit participation, but said the main goal was to prevent abuses for personal gain.
He said a person who genuinely intended to win a land auction had to prepare money for the purchase in advance. It could be personal funds or a bank loan, but a participant could not arrive without preparation.
Tung said he did not think people with no money and no way to obtain it would take part. A 20–50% deposit was a large sum, but remained within the calculations of participants with a genuine need to buy.
The draft provides a range of 20–50%, rather than one fixed rate. The auction organiser would decide the specific rate based on the plot’s characteristics and local market conditions.
If the risk of profiteering is low in an area, a 20% rate could be applied. Tung said this would give the rule flexibility in practice.
Regarding frozen capital, Tung said that if an auction was conducted quickly and ended soon, the deposited money could be released in full.
Sources: Thanh Niên
