What’s the Deal with Land Use Rights?

landuseIn the PRC, it is known that land is owned by the state or collectivities. It was not until the 1980s under Deng Xiaoping’s guidance that the land ownership and rights of use could be separated and individuals could possess the land-use right for a certain amount of years. The Provisional Regulations on Grants and Assignment of Urban State- owned Land Use Rights, released in 1990, states that land for residential purpose can last 70 years, the longest of any purpose, while land for industrial, educational, scientific, health and sports purposes lasts 20 years less. But since the regulation was issued, people have been asking another question: what about after 70 years? Can the owners of residential properties keep living in their houses?

In China, a house buyer owns the house forever and the land-use right beneath the house for 70 years, starting on the date the developer gained the right from related land administrations. So it’s possible that when the property is sold, there is less than 70 years land use duration left to the owner. According to the Land Administrative Law, the Chinese authorities are empowered to expropriate any land and withdraw the land-use right for the reason of public interest since all land is owned by the state or collectivities.

A general list of such public interest includes defense, transportation infrastructure, education and health. So the land might be taken over anyway whether the land-use right expires or not. The differences are in compensation, which is certainly without consideration to illegal land users. Technically, the compensation is made for the private property owned on the land such as structures and crops, not for the loss of the land holder’s land use rights.

In 2007, a breakthrough Property Rights Law ended the long-term debate and solved the problem for now. Article 149 states that “the term of the right to the use of land for building houses shall automatically be renewed upon expiration; the term of the right to use of land for non-house building purposes shall be renewed according to laws and regulations upon expiration,” which grantees a permanent use right to land holders.