Limited rights buildings that have been uprooted near a farm in Haikou, Hainan Province, on August 10, 2010. Photo: CFP

China has recently committed itself to reforming land usage policies, outlining mechanisms to be used in the future. However, recent policy announcements have further confused owners and potential buyers of so-called "limited rights" properties.

The term limited rights property refers to commercial real estate developments constructed on collectively owned land - usually village land - unlike normal properties that are built on officially warranted land for which the developer has paid a transaction fee to the government.

Due to the unpaid land transaction fees, which could be as much as billions of yuan according to the land's commercial value, limited rights properties usually cost thousands of yuan per square meter less than normal properties in similar locations. As property prices soar in Chinese cities, this form of affordable housing, though illegal and without ownership certificates, has secured a growing market share.

Forceful demolitions of such houses have appeared around the country, when local governments were determined to clear the market.

Buyers of these properties have long speculated that the government would some day recognize the legal status of this housing.

The Communist Party of China plenum in early November stated that rural land, once allowed to enter the market, should be given equal treatment as urban land for commercial usage, but this was followed by a conflicting yet reiterated ban on limited rights properties jointly issued by two ministries in charge of land and construction.

At the same time, the dismantling of limited rights properties has continued, leaving owners extremely anxious.

Global Times

A bulldozer dismantles hillside villas with limited rights in a scenic spot in Changping, Beijing, on November 25. Photo: CFP

 

Below: A nine-story building with limited rights is demolished by an explosion in Haikou, Hainan Province, on December 16, 2010. Photo: CFP

 

A total of 13 four-story homes are demolished in an effort by the government to clear limited rights properties in Changping, Beijing, on November 4. Photo: CFP

 

Owners of a limited rights apartment guard their home from being forcefully demolished in a village in Fangshan district, Beijing, on July 28, 2011. Photo: CFP

  

A banner hangs on buildings still under construction, indicating that they are limited rights properties and are slated for demolition, in Tongzhou, Beijing, on July 16.