Chinese Premier Li Keqiang said the government is amending laws to extend the land use rights of residential properties “unconditionally and automatically” when they reach the end of the 70-year lease.
Under existing laws, all land is collectively owned by the state, and rural land is under collective ownership overseen by local party bosses.
In 1990 China adopted a free market approach to developing urban land, fuelling a boom in the property market. Land sales accounted for more than half of the fiscal revenues of local governments last year.
Up to now, however, Chinese residents only have the right to use the land, not own it.
And the limit of land lease is typically set at 70 years for residential purposes and 50 years for industrial use.
The first batch of land use rights will expire in 2060. As a result, many homeowners were worried about having to pay exorbitant fees to renew their land leases.
Various government departments and officials have tried to assure the people that land leases will be renewed upon expiry, but such assurances have not completely dispelled their concerns.
So now it’s Premier Li himself who has spelled out the policy, stressing that land leases will be renewed without any precondition.
Li understands that such a clear-cut guarantee is needed to put everyone’s mind at ease. “One shall have his peace of mind when he has a piece of land,” he said.
Meanwhile, the land lease issue is even more pressing in Hong Kong.
Most of the land leases in the New Territories are set to expire by 2047. There is widespread concern that landlords and tenants may need to pay land premium to extend their leases.
None of the city’s senior government officials have openly addressed this issue.
Former development secretary Paul Chan Mo-po only said the government would work out a “smart” solution similar to the 1997 arrangement.
But the lack of clarity on the issue is not helping at all to ease concerns.
This article appeared in the Hong Kong Economic Journal on March 16
Translation by Julie Zhu
[Chinese version 中文版]
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