New Regulations Tighten Discipline in Land Auctions, Restrict Deposit Forfeiture

The Government has just promulgated Resolution No. 66.11/2026/NQ-CP on resolving difficulties and obstacles in the auction of land use rights, which shall be effective from January 6, 2026 to February 28, 2027. The Resolution introduces two notable new provisions aimed at strengthening auction discipline and curbing the practice of bidding high prices followed by forfeiture of deposits.

1. Increase in the deposit amount required from individuals participating in the auction of residential land

New regulation: Individuals participating in the auction of residential land use rights are required to pay a deposit ranging from 10% to 50% of the starting price.

Previous regulation: Article 39 of the Law on Property Auction provides for a deposit ranging from 5% to 20% of the starting price.

Impact: Raising the maximum deposit threshold to 50% compels auction participants to give more serious consideration to their financial capacity, thereby reducing the incidence of high bidding followed by deposit forfeiture. However, given the wide range stipulated, local authorities may tend to apply the highest level (50% of the starting price) for the sake of “safety”, which could unintentionally create additional barriers for ordinary citizens. Notably, this regulation applies only to individuals; it does not apply to enterprises participating in the auction of land use rights for investment project implementation (enterprises continue to be subject to the deposit range of 10% to 20%).

2. Prohibition on individuals participating in land auctions for up to a maximum of 5 years

New regulation: An individual who wins an auction of residential land use rights but fails to fulfill the obligation to pay the auction-winning amount, resulting in cancellation of the auction result, shall be prohibited from participating in future land auctions. Specifically, within 10 days from the date of cancellation of the auction result, the competent authority shall issue a decision imposing:

• a ban on participation in land auctions for a period of 02 to 05 years in cases where the auction-winning amount is not paid at all (i.e., forfeiture of deposit);
• a ban on participation in land auctions for a period of 06 months to 03 years in cases where the auction-winning amount is paid incompletely.

Previous regulation: Article 70 of the Law on Property Auction mainly imposed sanctions prohibiting participation in auctions for a period of 06 months to 05 years against enterprises that forfeited deposits when participating in auctions of land use rights for investment projects or mineral exploitation rights. There was previously no specific provision prohibiting individuals participating in residential land auctions.

Impact: The new regulation fills a previous legal gap and significantly strengthens the deterrent effect against individuals who win auctions but subsequently forfeit their deposits. The risk of being barred from participating in land auctions for an extended period compels bidders to exercise far greater caution before defaulting, thereby contributing to the reduction of speculative behavior, artificial price inflation, and the formation of “virtual fever” phenomena in land auctions.