Developers will be charged a 20- percent fee if they hoard land plots and leave them idle for more than one year but less than two years after acquiring them, the State Council said in a notice on its website on Monday.
The council, China's Cabinet, also said that land plots left aside for more than two years will be reclaimed by the government.
The fee, equivalent to 20 percent of the land transaction price, will be levied strictly from now, industry experts said. Previously, the fee was not regarded as obligatory since the government said it might be charged on "principle."
The tougher measures, the latest in a series of macro control policies which aim to cool the country's red-hot real estate market and curb soaring property prices, will likely impact greatly domestic land supply, industry analysts said.
"The nationwide shortage of land supply will probably be eased when such heavy-handed measures are implemented," said Xue Jianxiong, head of research at Shanghai Youwin Real Estate Information Service Co. "By imposing (the fee) stringently, the government will be able to have an overall control of its land reserves."
Land left untouched for more than two years will be taken back by the government. Plots that couldn't be legally reclaimed should be dealt with as quickly as possible in appropriate ways such as changing their designated purpose, bartering, assign temporary uses for them or retain them for government reserves, according to the notice.
The notice also said the Ministry of Land and Resources should join forces with other relevant departments to work out detailed plans regarding land appreciation fees on idle plots.
A tight land supply has been long attributed as the major reason for surging housing prices across the country.
The government's determination to implement the tough measures is certainly good news to both home buyers and qualified developers who have been plagued by the land shortage, industry officials said.
A recent survey has found that the local supply of residential properties will likely remain tight for at least three years due to insufficient land supply over the previous years.
Prices for the city's new apartments, excluding budget homes and houses meant for relocated residents, rose more than 10 percent last year on average compared to 2006.
(Shanghai Daily January 9, 2008)
