The Chinese government has decided to drastically raise fees and taxes associated with land sales, including doubling compensations to incumbent tenants, to curb runaway investment.
According to a new policy revealed by the Ministry of Land and Resources Thursday, fees paid by developers to compensate the losses of incumbent tenants would be doubled.
This shall benefit tens of thousands of rural and urban Chinese families that annually lose their farm lands or homes to the mushrooming development projects.
The land use fee for new construction projects shall also be doubled. The current charges vary from five yuan (US$0.63) to 70 yuan (US$8.78) per square meter.
The government also intends to triple the taxes on urban land, which currently stand at 1.2 yuan (US$0.15) per square meter, the ministry said.
The ministry estimates that the new policy may push the price of some industrial land up by 40 percent to 60 percent. This is acceptable according to experiences in cities where the new policy has been tried.
The ministry said higher land prices fees will check the excessive redevelopment of land by industrial projects and force local governments to improve the viability of the projects.
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