Can You Own Land In China?

Today’s topic is on getting real estate in China and we will talk about whether foreigners can buy apartments in China and whether or not it is possible to own land.

Since 2006, it has been forbidden for foreign companies and individuals to directly purchase and hold real estate for investment purposes. To carry out real estate investment, you will need to gain approval from the government to set up a local company for such purposes. However, it is possible to acquire real estate for residential purposes if you are working or studying in China, but different cities have different local requirements. There is a limitation on only 1 apartment that you can buy in big cities like Shanghai, Beijing and Shenzhen, and they may also require that you show proof of social insurance payments, tax records, and work permit.

As China is a socialist country, all land is either subject to government or collective ownership.  All urban land, also known as state-owned land, is owned by the government while suburban and rural land, also called collective land is owned by collectives. Collectives means groups of villagers or farmers. Therefore, it is not possible to buy land.

So what happens when you buy an apartment? To understand how that works, we will go through the whole process of obtaining the right to use land to buying a new apartment from a real estate developer. The developer first has to win a bid for the right to use a residential site for a term of 70 years, which is the maximum period for such a land grant. The developer then signs a contract with the government, pays them for the lease, and starts construction. You then buy the apartment on a strata-title basis from the developer, and register your real estate title at the local registry. After that, you get your real estate certificate and congratulations, you may enjoy ownership of the apartment for the remaining term of the 70-year land grant.

So what happens after the 70 years? Your title will be automatically renewed so you don’t have to worry about losing your apartment. Regarding renewal of the land grant, the realty owner’s committee will have to submit an application at the land bureau and pay another land grant fee for another 70 year lease. If the building is too old, for example the first apartments in Shanghai that were built in 1958, the Shanghai government took it down and built a new building in the same place, and gave owners back apartments the same size as their old ones.