China land ministry clarifies the mystery of how to deal with expired land use right

Finally, China Ministry of Land and Resources posted on its website yesterday a Q&A series in which the long-waited guideline on how to deal with land use rights that have expired in some cities in China.

Early this year, local government in Wenzhou, Zhejiang province was reported to be ready to collect renewal fee from people whose properties are sitting on land that has expired in terms of its use right granted to those users in early nineteen eighties. That news immediately spiraled into a national outcry which prompted the ministry to call off Wenzhou government’s intended action.

In November China announced its first policy to call on equal protection of properties esp private properties with a view to instilling people’s confidence in China’s future in which the announcement specifically mentioned that the government should study laws relating to land use right to give clear expectation to its people.

Here comes the formal reply from China Ministry of Land and Resources to the question raised by its local counterpart in Zhejiang province:

国土资源部办公厅关于妥善处理少数住宅建设用地使用权到期问题的复函

国土资厅函〔2016〕1712号

浙江省国土资源厅：

《关于如何处理少数住宅用地使用权到期问题的请示》（浙土资﹝2016﹞64号）收悉。经认真研究并征得住房和城乡建设部同意，现将有关问题答复如下:

《物权法》第149条规定：“住宅建设用地使用权期间届满的，自动续期”。《中共中央国务院关于完善产权保护制度依法保护产权的意见》（中发﹝2016﹞28号）提出，“研究住宅建设用地等土地使用权到期后续期的法律安排，推动形成全社会对公民财产长久受保护的良好和稳定预期”。在尚未对住宅建设用地等土地使用权到期后续期作出法律安排前，少数住宅建设用地使用权期间届满的，可按以下过渡性办法处理：

一、不需要提出续期申请。少数住宅建设用地使用权期间届满的，权利人不需要专门提出续期申请。

二、不收取费用。市、县国土资源主管部门不收取相关费用。

三、正常办理交易和登记手续。此类住房发生交易时，正常办理房地产交易和不动产登记手续，涉及“土地使用期限”仍填写该住宅建设用地使用权的原起始日期和到期日期，并注明：“根据《国土资源部办公厅关于妥善处理少数住宅建设用地使用权到期问题的复函》（国土资厅函﹝2016﹞1712号）办理相关手续”。

2016年12月8日

The main idea is that:

(1) residential property owners don’t have to apply for renewing the land use right term upon expiry of old lease term;

(2) local land departments shall not collect any fee upon expiry of old land use right term;

(3) properties whose land use rights expire shall be transacted as usual. The old expired land use right term shall be still recorded there.

There are wide exclamations in the online community taking it as a propitious token of the future formal treatment of the same issue.

However, while I personally do not think the government will come up with any drastically different approach in the future on the issue but it may not be appropriate to read too much out of this short notice from the ministerial department. After all, this reply to local government is only an interim measure to pacify the property market at a time many are thinking the property market in China may have a big problem soon. This gesture will somehow augment people’s belief that there will be no big deal in regard of their properties in spite of expiry of original land use right term.

One shall have to bear in mind the land use right issue is such a paramount and fundamental issue that only China’s top legislature can provide a final solution by way of law enactment.

It is not really likely that the China government will just leave the land to property owners for indefinite use without charging anything for it. Too good to be true.