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Chinese Law on Private Ownership of Real Property

At the Law Library of Congress, we have been asked many times about the law of the People’s Republic of China (PRC or China) on private property, such as whether individuals may privately own houses, or whether the law protects private property at all. With this blog post, I’d like to discuss a few basics of Chinese law in this area.

The PRC Constitution on Private Property

The current PRC Constitution, as most recently amended in 2004, clearly provides for the protection of “private property.” According to Article 13 of the Constitution, citizens’ lawful private property is “inviolable.” The same article also states: “[t]he state, in accordance with law, protects the rights of citizens to private property and to its inheritance.”

Sunrise on a foggy day in Shanghai, photo taken by Laney Zhang in 2013.

Sunrise in Shanghai in Dense Fog, photo taken by Laney Zhang in 2013.

Prior to the 2004 amendment, the Constitution provided protection of “the right of citizens to own lawfully earned income, savings, houses and other lawful property.” The 2004 amendment for the first time clearly designated these properties to be “private property” and constitutionally inviolable.  It’s worth noting, however, that private property may not receive equal protection in the same way as public property. Article 12 of the Constitution held that “socialist public property” is “sacredly inviolable.” Compared with the language on private property which is “inviolable,” the word “sacredly” appears to be an indication of more weight of protection being given to public property.

Laws Regulating Real Property

According to the Constitution, land in cities is owned by the State; land in the rural and suburban areas is owned by the State or by collectives. (Constitution, art. 10.) Although individuals cannot privately own land, they may obtain transferable land-use rights for a number of years for a fee. There are a series of laws and regulations regulating the land-use rights and ownership of residential property, including:

  • The Property Rights Law [Wuquan Fa], promulgated by the National People’s Congress (NPC) on March 16, 2007, effective October 1, 2007;
  •  The Law on Land Management [Tudi Guanli Fa], promulgated by the NPC Standing Committee on June 25, 1986, revised August 28, 2004;
  • The Land Registration Measures [Tudi Dengji Banfa], promulgated by the Ministry of Land and Resources on December 30, 2007, effective February 1, 2008);
  • The Interim Regulations Concerning the Assignment and Transfer of the Right to Use State-Owned Land in Urban Areas [Chengzhen Guoyou Tudi Shiyong Quan Churang He Zhuanrang Zanxing Tiaoli], Decree No. 55 of the State Council, May 19, 1990 (hereinafter “Assignment Regulations”); and
  • The Law on the Administration of Urban Real Estate [Chengshi Fangdichan Guanli Fa], promulgated by the NPC Standing Committee on August 30, 2007, effective on the same day (hereinafter “Urban Real Estate Law”).

According to the Property Rights Law, the land-use right is a “usufructuary right” that allows the right-holder, the usufructuary, to legally possess, use, and benefit from property owned by another. (Property Rights Law, art. 117.)

In urban areas, the state grants (churang, sometimes also translated as “assigns”) land-use rights to land users for a fee. Land users pay the state granting fees for a certain number of years for these land-use rights. (Urban Real Estate Law, art. 8.) The State Council is authorized by law to formulate the maximum periods for which land-use rights may be granted. Under the current rules prescribed by the State Council, land may be used for residential purposes for up to seventy years; for industrial purposes for fifty years; for education, science, culture, public health, and physical education purposes for fifty years; and for commercial, tourist, and recreational purposes for forty years. (Assignment Regulations, art. 12.)

When the 70-year term for the land-use right for residential purposes expires, according to the Property Rights Law, the term will be automatically renewed. (Property Rights Law, art. 149.) The law does not make it clear, however, whether the state would charge another granting fee at the time of renewal or how such a fee would be determined.

Exterior garden space with dragon head atop a wall at a temple in Shanghai, China by Norwood, Jean E., 1979. Library of Congress Prints and Photographs Division, http://www.loc.gov/pictures/resource/ppss.00498/.

Exterior garden space with dragon head atop a wall at a temple in Shanghai, China by Norwood, Jean E., 1979. Library of Congress Prints and Photographs Division, http://hdl.loc.gov/loc.pnp/pp.print.

Land-use rights may also be allocated (huabo), for which the land users pay no fee or only compensation or resettlement expenses, for such purposes as government or military use, and urban infrastructure or public utilities use. Different to chufang land-use rights, there are normally no limitations on the length of time for which land-use rights can be allocated. (Urban Real Estate Law, arts. 23&24.)

However, individuals may privately own houses and apartments, i.e. buildings and structures above the land, but not the land on which the houses and apartments are situated. The Property Rights Law provides that “[i]ndividuals are entitled to enjoy ownership of such immovable and movable properties as their lawful incomes, houses/apartments, articles for daily use, tools of production, and raw materials.” (Property Rights Law, art. 64.) When real estate is transferred, according to the Urban Real Estate Law, the ownership of houses/apartments and the land use right of the land on which the buildings are situated are transferred simultaneously. (Urban Real Estate Law, art. 32.)

The Law Library collects official Chinese language publications for the laws and regulations cited above, in addition to English translations of the laws. For more information on our Chinese law collection, see my previous blog post: A Guide to Chinese Legal Research and Global Legal Collection Highlights: Official Publication of Chinese Law.

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