Published by ChinaMNC · Nanmulin

Xuzhou's Collective Land Housing Compensation Rules: Key Points for Foreign Founders

A practical summary of Xuzhou's new measures for compensating owners of houses on collective land, relevant to foreign founders whose operations may involve land acquisition or relocation.

Overview of Xuzhou's New Collective Land Housing Compensation Measures

Foreign founders operating in China may encounter land acquisition and relocation issues, particularly when leasing or acquiring properties on collective land. The Xuzhou Municipal Government has issued the Measures for Compensation for Houses on Collective Land in Xuzhou Urban Area, effective February 3, 2026. This article summarizes the key provisions relevant to foreign-invested enterprises and founders.

Scope and Applicability

The Measures apply to compensation and resettlement for houses on collective land within Xuzhou's urban area, excluding Tongshan District and Jiawang District. The term “expropriated person” refers to the owner of the house on collective land.

Responsibilities and Principles

The municipal natural resources and planning department supervises collective land expropriation, while the housing and urban-rural development department oversees house expropriation. District governments are responsible for implementation within their jurisdictions and designate specific expropriation departments. Other district departments, sub-district offices, and village committees assist as needed.

Expropriation must follow the principle of compensation before relocation. Compensation funds must be fully secured, deposited in a dedicated account, and used exclusively for that purpose.

Pre-Expropriation Procedures

After a pre-expropriation announcement, new construction, renovation, expansion, or changes to land use are suspended. District governments then draft compensation and resettlement plans based on land surveys and social stability risk assessments. These plans must include: scope and timing, compensation and resettlement methods, standards for various compensations and rewards, contract signing periods, transition arrangements, relocation deadlines, and details of resettlement housing.

Public Consultation and Hearings

Draft plans must be published for at least 30 days in the affected sub-district, village, and on the district government website. If more than half of the affected collective economic organization members object, a hearing must be held. Even with less than half objecting, a hearing may be held if deemed necessary. Plans are revised accordingly and republished.

Eligibility for Compensation

Individuals who move their household registration due to birth, marriage, military service, retirement, education, or release from prison, and who meet household registration rules, may receive compensation and resettlement on the same terms as collective economic organization members.

Determining Legitimate Building Area

Compensation is based on the legitimate building area, primarily as recorded in the property ownership certificate or real estate registration certificate. If only a homestead certificate or rural housing land use permit exists, the legitimate area is determined as follows:

• If the actual building area is less than 1.4 times the area stated in the homestead certificate, the actual area is recognized.
• If the actual building area is equal to or greater than 1.4 times the stated area, the area is recognized up to 1.4 times; any excess is not recognized.

If neither certificate exists, the district government first confirms homestead ownership and area, then applies the above rules.

Exclusions from Compensation

Illegal constructions, temporary structures exceeding the approved period, and new construction, renovation, or expansion undertaken after the pre-expropriation announcement are not compensated or resettled.

Compensation and Resettlement Options

Expropriated persons may choose monetary compensation or property exchange. For monetary compensation, the house is appraised by a qualified real estate appraisal agency, and compensation is based on appraised value. A “home purchase card” may be used to buy new commercial housing, following state-owned land policies. For property exchange, the resettlement area is based on the recognized building area, and settlement follows state-owned land house expropriation rules.

The appraisal agency is selected through negotiation by expropriated persons. If no agreement is reached within the specified period, the expropriation department selects one by on-site drawing of lots, notarized by a notary public.

Non-Residential and Mixed-Use Houses

For non-residential houses, compensation for suspension of business is provided, with standards referencing those for state-owned land. If a residential house is used for non-residential purposes, it is treated according to “residential-to-non-residential” standards for state-owned land. However, if a residential house is rented or lent to others for non-residential use, it remains classified as residential, and no resettlement or compensation is given to the tenant or borrower.

Transition and Moving Subsidies

The compensation agreement must specify transition periods for both immediate and future housing. If the expropriated person arranges their own temporary housing, a temporary resettlement subsidy is paid. A moving subsidy is also paid based on the legitimate building area.

Dispute Resolution and Enforcement

If no compensation agreement can be reached within the expropriation period, the district government may issue a compensation decision for individual cases. If the expropriated person neither applies for administrative reconsideration nor files an administrative lawsuit within the statutory period and refuses to relocate, the district government may apply to the people's court for enforcement.

Implications for Foreign Founders

Foreign founders should be aware that if their business operates on collective land, they may be affected by expropriation. It is crucial to ensure that lease agreements and property documents are clear, and to understand the compensation procedures. Early engagement with local authorities and legal counsel is advisable.

This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.