Explaining China’s Real Estate Law

With China’s rapidly expanding economy there is an increased need for residential housing, commercial space, and industrial parks that are structured to meet the unique requirements of the Chinese population. Real estate has been one of the few brightest spots in China’s investment landscape as the government clampdown is not as aggressive as it used to be even a few years ago.

 

Sectors such as large-scale theme park construction, lithium mining, credit rating services, precious metals, and internet access services that are previously restricted are now opened up to the foreign capital. In manufacturing, foreign companies are allowed to produce their own rail transport facilities, instead of having to set up joint ventures with local firms. Rules were also eased for foreign companies manufacturing electric vehicles and related products.

 

Laws on Real Property in Urban Areas

In addition to the Property Rights Law, China regulates real property through a series of other laws and regulations, including the PRC Law on Land Management, the Land Registration Measures, the Interim  Regulations Concerning the Assignment and Transfer of the Right to  Use State-Owned Land in Urban Areas (Assignment  Regulations), and the PRC Law on the Administration of Urban Real Estate (Urban Real  Estate Law). Among these laws and regulations, the Assignment Regulations and the Urban Real Estate Law primarily regulate land-use rights and ownership of residential property in urban areas.

 

Since the real estate industry works as the reservoir for the sedimentary capital of bank loans, the stabilization of real estate prices will reduce the financial systemic risks markedly.

 

Granting of the Land-use Right

 

Article 7– Granting of the land-use right refers to acts that the State grants land users the right to use the State-owned land (hereinafter referred to as the land-use right) for a certain number of years and the users shall pay the State a granting fee for the land-use right.

 

Article 8– The land-use right for the collective-owned land within a planned urban district may be granted with payment only after it is requisitioned in accordance with the law and turned into State-owned land.

 

Article 9– Granting of the land-use right must conform to the overall planning for land utilization, urban planning and the annual plan for land to be used for construction.

 

Article 10– Where the local people’s governments at or above the county level grant land-use right for the development of the real estate, they must, based on the quota set by the people’s governments at or above the provincial level, draw up plans for the total area for annual granting of the land-use right, which shall, according to the regulations of the State Council,  be reported to the State Council or the provincial people’s government for approval.

 

Article 11– Granting of the land-use right shall be carried out by the people’s governments of the cities or counties in a planned and step-by-step way. With regard to each lot granted, plans for its purposes, term of use, and other conditions shall be worked out by the departments of land administration under the people’s governments of the cities and counties in conjunction with the competent departments of urban planning, construction and housing administration. Such plans shall, according to the regulations of the State Council, be implemented by the departments of land administration under the people’s governments of the cities or counties after their submission to and approval by the people’s governments with due authority for approval.

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