Exempt homeowners from paying fee for land use rights renewal

Photo taken on Jan 1, 2015 shows an apartment project in Huzhou, East China's Zhejiang province. [Photo/Xinhua]

The expiry of land use rights for urban houses is now a hot topic of discussion, as the majority of the people want the land use rights to be renewed for free. But legislation demands that a reasonable fee for extending land use rights be charged for the renewal.

The Property Law talks about "automatically renewing" land use rights, which tends to indicate "unconditional" renewal. But if land use rights could be "unconditionally" renewed for free, why did legislators bother to stipulate the time limit for it? More importantly, automatic free renewal of land use rights is equal to permanent ownership of land, which would turn land use rights into property rights and would be a drain on State-owned assets.

The drafters of the Property Rights said the original intention of "automatically renewing" is not "renewal for free". What it means is that homeowners don't have to queue up again to get their land use rights renewed.

The fundamental basis for charging a fee for renewal is that land belongs to the State. China's unique land system makes it difficult for those versed in regular property rights theory to understand the issue in its entirety, and hence the controversy.

China's Constitution says that urban land belongs to the State. It could be further interpreted as: "once non-State-owned land is incorporated into urban areas during the process of urbanization, it will belong to the State".