China posted a clarification regarding the land rights in the country. The issue had plagued millions of homeowners in China who had their wealth tied up in the real estate. The country has said that a certain group of homeowners in Wenzhou will not be required to pay an extension fee for their lands.

Like Us on Facebook

The issue erupted in Wenzhou when the local government informed some of the homeowners that they would be required to pay high fee, up to one third of their property value, for renewing their expired 20-year lease on land. The announcement led to panic across the country as real estate is one of the most promising sectors of the Chinese economy.

However, on Friday, China's vice minister of land and resources, Wang Guanghua, stated that the homeowners would not be required to pay any such fee. All land in the country belonged to the government and it is leaded out to homeowners through leases.

China is likely to face this issue again as the minister did not put forward any final resolution. Wang stated that the government is still contemplating a new law, which may be used for regulating lease renewals throughout the country.

The country mainly has 70 years tenure for leases. The shorter tenures were introduced during the 1990s to reduce the price tag for real estate properties. China is currently facing overheated real estate sectors with housing prices zooming to new highs. The country officials have instituted several regulatory measures to curb speculative investments in the sector.

TagsWenzhou, Land Leases, china