Procedure for the auction of land use rights to implement investment projects

Auction of land use rights to implement investment projects is a form of land allocation through market mechanisms, strictly regulated by land law and asset auction law. This process requires full compliance with planning conditions, land use plans, capacity of participating organizations and procedures prescribed by the State. The following article will analyze the application process and conditions in detail.

Conditions for auctioning land use rights

Conditions for conducting the auction

To conduct an auction of land use rights, the land to be auctioned must meet four basic conditions. Specifically includes:

• First, the land has been recovered and compensation, support, and resettlement has been completed or no compensation, support, or resettlement is required; There must be connected transportation infrastructure in the project area;
• Second, the land must be included in the approved district-level annual land use plan for the purpose of auctioning land use rights, except in the case of auctioning land use rights for land recovered by the State and assigned to a land fund development organization for management;
• Third, for housing construction investment projects, a detailed 1/500 plan is required to be prepared and approved by a competent state agency;
• Finally, there must be a plan to auction land use rights approved by a competent authority.

The above conditions are clearly stipulated in Clause 2, Article 125 of the Land Law 2024, creating a strict legal corridor to ensure that the auction of land use rights takes place publicly, transparently and in accordance with the law. Full compliance with these conditions is a mandatory requirement for agencies and organizations competent to organize auctions.

Conditions for organizing participation in auctions

Organizations participating in the auction of land use rights must meet a number of strict conditions as prescribed by law. Clearly specifying these conditions is to ensure that only organizations with sufficient capacity and experience can participate in the auction process.

According to Clause 3, Article 125 of the Land Law 2024 and Clause 1, Article 55 of Decree 102/2024/ND-CP, organizations participating in the auction of land use rights need to meet the following specific conditions:

1. Organizations must be subject to land allocation or lease by the State according to the provisions of Article 119 and Article 120 of the Land Law 2024.
2. Organizations must ensure the conditions for land allocation and land lease specified in Article 122 of the Land Law 2024 in cases of land allocation and land lease to implement investment projects; At the same time, they must have capacity and experience in project development and other conditions according to the provisions of law on asset auctions.
3. A group of companies that is an economic corporation or parent company or subsidiary according to the provisions of the law on enterprises, when participating in the auction of a plot of land, area of ​​land or a project consisting of one or more plots of land, must agree to appoint a company belonging to the group of companies to participate in the auction of land use rights.
4. When participating in the auction, the organization must pay a deposit equal to 20% of the total value of the land plot or plot of land calculated at the starting price and must not be banned from participating in the auction according to the provisions of law.
5. For housing or real estate business projects, organizations participating in the auction must also meet the conditions prescribed by the law on housing and real estate business.

Note: For individuals who want to participate in the auction of land use rights to implement investment projects, they must commit to establishing an economic organization that fully meets the above conditions. The establishment of economic organizations is carried out in accordance with the provisions of investment law, enterprise law, bidding law and other relevant laws.

The current procedure for the auction of land use rights to implement investment projects

The procedure for the auction of land use rights to implement investment projects is detailed in Article 229 of the Land Law 2024 and Article 55 of Decree 102/2024/ND-CP. This process includes the following specific steps:

Step 1: Prepare and approve the auction plan:

According to Clause 1, Article 229 of the Land Law 2024, the unit assigned to manage the land fund is responsible for preparing a plan to auction land use rights and submit it to the competent authority for approval. The land use rights auction plan includes the following main contents:

• Location, area, type of land, assets attached to land plots and auction land (if any);
• Forms of land allocation, land lease, term of use of land plots and land areas when auctioning land use rights;
• Estimated time to organize the auction;
• Subjects and conditions participating in the auction;
• Costs for organizing the auction;
• Estimated starting price, deposit to be paid when participating in the auction and other revenues as prescribed by law;
• Other contents are decided by the competent authority in accordance with the provisions of law and the actual situation of the locality.

CSPL: Clause 3, Article 55, Decree 102/2024/ND-CP.

Step 2: Appraise and approve the land use rights auction plan

In case the auction of land use rights falls under the authority of land allocation or land lease of the district-level People’s Committee, the agency with land management function at the district level shall check and complete the dossier to submit to the district-level People’s Committee for approval of the land use rights auction plan.

In case the auction of land use rights falls under the authority of land allocation or land lease of the Provincial People’s Committee, the agency with the function of provincial land management shall check and complete the dossier to submit to the Provincial People’s Committee for approval of the land use rights auction plan.

Step 3: Determine and approve the starting price

The unit assigned to organize the auction of land use rights is responsible for preparing documents for the auctioned land plots and land areas.

The dossier includes: information on planning, land use plans and detailed construction planning related to the auctioned land plot approved by a competent state agency; Extract of cadastral map or extract of cadastral map measurement of land plot or extract of cadastral measurement of auction land plot in case there is no cadastral map.

The agency with land management function organizes the determination of the starting price of the land and land plot for auction and submits it to the People’s Committee at the competent level for approval.

Step 4: Based on the request of the agency with land management function, the competent People’s Committee decides to auction land use rights:

The agency assigned to auction land use rights prepares auction documents and sends them to the agency with land management functions. The documents include: approved land use rights auction plan; Document approving the starting price of the auctioned land or land plot according to the provisions of Point c, Clause 1, Article 229 of the Land Law; Draft proposal and decision on auction of land use rights.

The agency with land management functions checks and completes the dossier to submit to the People’s Committee at the competent level for approval of the plan for auctioning land use rights to implement investment projects to issue a decision on the auction of land use rights to implement investment projects.

Step 5: Select and sign a rental contract for the unit and organize the auction of land use rights to implement investment projects:

The selection of units and organizations to conduct the auction of land use rights shall comply with the provisions of law on bidding. The order for conducting the auction of land use rights shall comply with the provisions of Clause 2, Article 229 of the Land Law and the Law on Asset Auctions.

Step 6: Conduct an auction of land use rights to implement investment projects.

• Units and organizations conducting auctions according to the provisions of the Law on Asset Auctions;
• Organize listing and public announcement of the auction;
• Organize auction participants to pay deposits;
• Organize the auction according to regulations.

Step 7: Recognition of land use rights auction results:

• The unit assigned to organize the auction of land use rights prepares documents and sends them to the agency with land management function to submit to the competent People’s Committee to issue a decision to recognize the winning results of the land use rights auction;
• The People’s Committee at the competent level signs and issues a decision recognizing the results of the successful auction of land use rights and sends them to the agency with land management function, the unit assigned to organize the auction of land use rights, the tax agency and the winner of the land use rights auction.
• The winning bidder must then pay land use fees and land rent according to the provisions of law.

Step 8: Pay land use fees and land rent after there is a decision to recognize the winning results of the land use rights auction:

Within no more than 05 working days from the date of receiving the decision recognizing the winning auction results from the People’s Committee at the competent level, the tax authority shall send a written notice of payment of land use fees or land rent to the person who won the auction according to the provisions of law on tax administration.

The winner of the land use rights auction is responsible for paying land use fees according to the tax authority’s notice.

From the time of announcing the winning auction results, the deposit and interest (if any) are converted into a deposit to ensure the fulfillment of the land user’s financial obligations.

In case the auction winner does not pay or does not fully pay the land use rights auction winning amount as notified by the tax authority, then after 120 days from the date of approval of the land use rights auction winning result, the tax authority is responsible for notifying the agency with land management function to submit to the competent People’s Committee to cancel the decision to recognize the auction winning result, the auction winner will not receive the deposit back.

In cases where the auction winner has paid more than the deposit, the State will refund the difference greater than the deposit according to regulations.

The tax authority notifies the agency with land management functions that the auction winner has completed the payment of land use fees and land rent.

Step 9: Issuing decision on land allocation or land lease:

After the auction winner completes the payment of land use fees and land rent, the agency with land management functions is responsible for:

• Submit to the People’s Committee at the competent level to issue decisions on land allocation, land lease and sign the Certificate of land use rights and ownership of assets attached to land;
• Transfer documents to the land registration organization or branch of the land registration organization to update and adjust the land database and cadastral records according to regulations;
• Sign a land lease contract in case of land lease.

Final step: Handing over land on the ground:

The agency with land management function shall preside over and coordinate with the unit organizing the auction of land use rights and the People’s Committee of the commune where the land is located to organize the handover of land on the ground and award the Certificate of land use rights and ownership of assets attached to land to the winner of the auction of land use rights.

Note: In case an individual participates in an auction of land use rights to implement an investment project, the competent state agency shall allocate or lease land to an economic organization established by the individual who won the auction of land use rights according to previous commitments.

When the deadline for paying land use fees and land rents according to regulations expires, and the individual who wins the auction of land use rights to implement an investment project does not establish an economic organization as committed, the agency with land management function shall submit to the People’s Committee with competent authority to issue a decision to cancel the decision to recognize the winning auction results. The handling of the deposit is carried out according to the provisions of Point c, Clause 9, Article 55 of Decree 102/2024/ND-CP.

>>> Reference: Procedures for land allocation through auction of land use rights.

In-depth consulting services on the land use rights auction process at Long Phan Consulting Company

With the complexity of land law and the land use rights auction process, many organizations and individuals need in-depth consulting services. Long Phan Consulting Company provides comprehensive consulting services on the land use rights auction process with a team of experienced experts in the field of land law.

In-depth consulting services on the procedure for the auction of land use rights to implement investment projects at Long Phan Consulting Company include:

• Evaluate legal conditions of the land, draft auction plan.
• Drafting auction participation documents, guiding land use planning, land valuation and working with state agencies.
• Receive authorization to work with the asset auction organization, ensuring compliance with legal procedures.
• Consulting and supporting customers throughout the auction process.
• Support in making payment procedures, receiving Certificates, signing land lease or land allocation contracts, updating land databases.
• Deliver results directly to customers.

With many years of experience working in the field of land law, Long Phan Consulting Company is committed to providing customers with professional, effective and comprehensive consulting services. We always update the latest changes in land law to ensure correct and sufficient advice according to current regulations.

Frequently asked questions about auctioning land use rights to implement investment projects

Below are some questions about auctioning land use rights to implement investment projects that we often receive, please refer to:

Are foreign enterprises allowed to participate in the auction of land use rights to implement investment projects in Vietnam?

Foreign enterprises can participate in the auction of land use rights in Vietnam if they meet the conditions prescribed by the Law on Investment, Land Law and related legal documents. However, they must establish legal entities in Vietnam and comply with land ownership restrictions for foreign investors.

In case the auction is not successful, how will it be handled?

When the auction is not successful (no registrants participate, no winning bidders or the auction is canceled), the competent authority will review factors such as starting price, participation conditions and may reorganize the auction after adjusting these factors to better suit the market.

Can I appeal the results of the auction of land use rights to implement investment projects?

Auction participants have the right to complain about the results and auction process within the legal time limit if they discover signs of violating legal regulations or not ensuring fairness and transparency. Complaints must be sent to the competent authority organizing the auction or to a higher authority.

After winning the auction, can I transfer land use rights to another unit?

After winning the auction and completing financial obligations, the auction winner can transfer land use rights to another unit after meeting the conditions prescribed by the Land Law and laws on real estate business. For investment projects, the transfer must also comply with regulations on project transfer.

What if the winner of the land use rights auction implementing an investment project can only pay part of the land use fee?

If the auction winner can only pay a part of the land use fee and not the full amount as notified by the tax authority, after 120 days from the date of approval of the winning auction result, the competent People’s Committee will cancel the decision to recognize the winning auction result. The winning bidder will lose the deposit, but will be refunded the difference paid (if any) compared to the deposit amount.

What is the difference between auctioning land use rights and bidding for projects with land?

Auction of land use rights to implement investment projects is a form of the State publicly selling land use rights to the highest bidder, focusing on the value of land use rights. Meanwhile, bidding for land projects is the process of selecting investors to implement the project based on many criteria such as financial capacity, experience, technical solutions and financial plans, not simply land price.

How is the deposit handled when participating in the auction of land use rights to implement an investment project?

The deposit (equal to 20% of the starting price) will be refunded to participants who do not win the auction within 03 working days. For the winning bidder, this amount and interest (if any) will be converted into a deposit to ensure the fulfillment of financial obligations. If the winning bidder does not fulfill their obligations, they will lose this money.

Is it necessary to complete site clearance compensation before holding the auction?

Yes, according to the provisions of Clause 2, Article 125 of the Land Law 2024, one of the conditions for organizing an auction of land use rights is that the land has been recovered and compensation, support and resettlement have been completed. This is to ensure that the auction winner can receive clean land and implement the project immediately after completing the procedure.

Conclude

The auction of land use rights to implement investment projects is a complex process, requiring strict compliance with legal regulations. To successfully participate in the auction, customers need to understand the conditions, processes and prepare carefully. Please contact Long Phan Consulting Company immediately at hotline 0906735386 to receive in-depth advice and comprehensive support during the procedure for the auction of land use rights to implement investment projects.