It’s the Season for Property Registration

By+Yuan+Yuan

The long-awaited rules of property reg- istration have finally come out. The provisional regulations were released by the State Council， Chinas cabinet， on December 22 last year. In accordance with Chinas Property Law， these rules mark the beginning of the countrys real estate registration work.

It has been six years since the registration system was first mentioned. In early 2014， the State Council asked the Ministry of Land and Resources to propose a property registration system by the end of June 2014. Originally， the regulations were to have been announced in June， but they were delayed by a number of issues.

Apart from the registration of apartment property， buildings in rural areas will also be registered to protect farmers rights and improve governments administrative efficiency. In rural China， farmers do not own the land they plow or build their houses on， as it is collectively owned， but they have the right to use it. The government has been trying to set up a network which will collect property ownership information from different places.

Thus the regulations will cover collective ownership of land， ownership of buildings and forest， contracted land management rights， and rights to the use of construction land， homesteads and maritime areas. According to the regulations， land and resources authorities will establish a platform to manage registration information that can be shared in real time and will be strictly confidential.

This is the first joint notice ever issued by five departments to stress coordinated moves for property registration in both cities and vil- lages， as the two have been divided in various administrative measures. The five departments are the Ministry of Land and Resources （MLR）， the Ministry of Finance， the Ministry of Housing and Urban-Rural Development （MOHURD）， the Ministry of Agriculture and the State Forestry Administration.

The regulations， which include 35 articles and will take effect on March 1， state that all governments above the county level shall designate special departments for registration in their areas and follow instructions from higher governments.

“A unified information platform will be established and begin trial operations in July， and it will become fully operational by 2017，” said Wang Guanghua， an official with the MLR who is in charge of the matter.

By that point， real estate approvals， transactions and registration information will be shared among different agencies， eliminating the previously “isolated information islands.” Every government jurisdiction that is at or above the county level is supposed to establish a special agency to be responsible for real estate registration.

“Segregated registration by different government departments was inefficient， bringing disorder and risk. The unified system will confirm ownership and reduce overlap between government agencies，” said Wei Lihua， a ministry official.“The system is in accord with the 2007 Property Law and ensures the security of transactions and protects owners.”

Information from housing， agriculture， forestry， and maritime authorities will be shared and the State Council has urged all departments to contribute relevant information.

It would allow the government to access and copy relevant registration information during investigations， but such information would not be made public without the consent of property owners.

The effects

The development of the regulations has garnered a lot of attention， with the public and some media outlets speculating that anticorruption efforts and a drive to levy taxes would be major goals of the move. Meanwhile， the government has made several statements， reiterating that the move has nothing to do with anti-corruption efforts.

Zhang Dawei， an analyst at Centaline Property， a real estate agency， said that some cities are seeing more luxury apartments for sale as the registration system moves forward. Speculative investment in the property sector might flow into other sectors on expectation of a property tax raising the costs of holding property assets.

“The data collected through the system will allow new taxes， such as a property tax and an inheritance tax，” said Hu Jinghui， Vice President of Chinas major real estate agency 5i5j.com.

Hu believes that many factors affect housing prices， including supply and demand and credit policies. He sees registration as just one of the indirect， long-term elements influencing prices.

“Registration will help us know exactly how many properties are there—how many people own homes and how many do not，” said Li Yang， Vice President of the Chinese Academy of Social Sciences （CASS）， “the effect on property prices needs to be watched.”

Sun Xianzhong， a legal researcher with the CASS， said that the regulations are in a “totally different arena” along with those laws that guarantee the transparency of officials assets. The information in the property registry will only be available to people who have a direct interest in a real estate deal.

Cheng Xiao， a law professor with Tsinghua University who helped draw up the regulations， said that the major objective is to clarify property rights， because clear property rights are the bedrock of the efficient functioning of a market economy.

“The clarity of ‘who owns what is critical for enabling market deals and ensuring the security of transactions，” said Cheng. “There have been many cases in which a buyer found that their newly purchased house did not belong to those who sold it or that the unit had been sealed by public security authorities. Unified real estate registration is an infrastructure project. It can facilitate anti-corruption and tax collection efforts， but thats an incidental function， not the original purpose.”

Cheng stresses security， which is a major aim of the registration system. “The registration system protects the information applicants register about their properties. It is not a system whereby anyone can look up how many houses a particular person has under his or her name，”said Cheng.

Chen Huai， a former policy researcher at the MOHURD， expounds on another aim of the registration system—organization and efficiency.

“What the registration system intends to achieve， as the rules show， is in essence the integration of the information about housing and other immovable properties in a single register so that the unified management of such information can be realized，”said Chen. “A property ownership registration regulation is a key foundation stone for Chinas market economy； like all civil laws， it will protect the market economy， effectively protect ordinary peoples property rights， and increase the convenience of buying and selling.”

Gu Yunchang， a property policy adviser with the MOHURD， said that even though the registration lays the foundation for imposing property tax， it will take several years to complete the registration process， so the effect will fall short of public expectations.

“It is too early to talk about the impact. Actually， other factors have a greater impact on home prices， including demand and supply， taxation and overall economic conditions，” Gu said.

A report released in December 2014 by an institute under the CASS said that home prices are very likely to decline further in 2015 and cities that still restrict multiple-home purchasing are expected to scrap the policy. Property downturn since the beginning of 2014 has prompted most of the cities that had restricted home purchases to ease them.

The CASS report estimated a 5-percent drop in home prices across the country in 2015. Annual sales are expected to fall by 12 percent， while residential property investment is expected to grow by 10 percent.

According to data from the National Bureau of Statistics， home sales in the first 11 months of 2014 fell by 9.7 percent from a year ago， while residential property investment grew by 10.5 percent.