New Proposed Mainland Property Law

Written on January 17, 2007 by a2zMacau

Macau people buying homes in the mainland are to get greater protection under a proposed new property law.The new law, which would strike a balance between private property and state ownership, would strengthen the confidence and desire of Macau people who plan to purchase properties in the mainland, local National People’s Congress deputy Ip Kwok-him said Monday.

Macau deputies to the NPC and the Chinese People’s Political Consultative Conference were briefed on the new law by NPC vice chairman Sheng Huaren, who hosted a preparatory meeting in Shenzhen Monday ahead of the annual NPC session starting in Beijing March 5.

The proposed law will be submitted to the NPC session for approval.

“Investors now only purchase the lease-out right of a property from the government for a period of 50 or 70 years. After that, investors would be required to return the property rights to the government,” said Ip, who is also vice chairman of the pro-Beijing Democratic Alliance for the Betterment and Progress of Hong Kong.

“But after the legislative proposal is passed, in the same scenario, the property rights could be returned to the owner automatically after the owner has paid a land premium to the government.”

Ip believed this could offer better protection to private property owners, as it requires all governments to compensate an owner for loss if any public interest-based land resumption exercise is carried out.

Another NPC deputy, Lau Pui-king, who is also associate professor at Hong Kong Polytechnic University’s School of Accounting and Finance, agreed that the introduction of the property ownership registration as included in the new bill would help safeguard the interests of private property owners.

But she said the improvements were still not sufficient to lure more Hong Kong and Macau people to buy mainland properties.

“For instance, at present, if a potential buyer is interested in buying a flat which is leased to a tenant, it’s the tenant who gets priority in purchasing the property. Under existing laws, the purchasing right lies with the user, not the property owner,” Lau said.

Although the new property law has gone through seven reviews since it was first submitted to the NPC in 2002, Sheng said Monday he was confident the proposed legislation could be passed in March.

Mainland law expert Ong Yew-kim said the new property law would be a “revolutionary move” for China, with the Communist Party having long viewed land resources as a state-owned asset that is sacred and inviolable.

“With all current laws and policy measures geared to protect state ownership and its assets, this legislation would instigate a drastic change in the nature of the mainland legal system, as all other secondary property legislation to be drafted in future would be based on protecting the interests of private property owners,” Ong said.

He believed implementing such a law could stimulate mainlanders’ desire to buy property and create a boom in the real estate market.

“Currently, many mainlanders have already earned a lot of money, but they’re reluctant to invest in property or even deposit their money with the banks as they fear the government would suspect the origin of their wealth and conduct an investigation,” Ong said.

“But once after the new legislation is implemented, it would offer better protection for their private properties and assets, as they would be free to deposit their money or buy property if they could prove the sources of their wealth were legal.”