Features

MOF unveils new rules for state land sales

• Publication Date：05/18/2010
• Source： China Times

In a move aimed at preventing developers from hoarding land to manipulate real estate prices, the government has formulated new stipulations allowing for the repurchase of state-owned lands sold via public tender but remaining idle for more than two years.

The new rules mapped out by the National Property Administration under the Ministry of Finance will be applied immediately to sales in Taipei City and Taipei County of state-owned land plots over 100 ping (331 square meters) in areas that are part of urban development plans, as well as plots over 150 ping that are not part of such plans.

According to the new regulations, purchasers of these plots of land in open bidding will be required to obtain construction licenses and begin development on the lands within two years of purchase or face forced sale of the land back to the government at the original selling price.

For land plots that must undergo the urban planning review process, the deadline for beginning development will be extended to three years.

This new policy marks the first time that the government has implemented rules on repurchasing state-owned lands.

Currently, state-owned land plots over 500 ping cannot be sold via public tender, and sales in Taipei City of plots under 500 ping through this process have been suspended for half a year. Therefore, the new rules will first be applied to plots of land between 100-500 ping in Taipei County that are part of urban development plans, as well as land plots between 150-500 ping in the county that are not included in city plans.

Private property developers have responded in an uproar over the new measures, viewing them as impractical.

An executive of Huaku Development said the new policy contains “blind spots,” claiming that it will lead to major controversies when it is put into practice. He noted that as a ban on sales of state-owned land plots over 500 ping via public tender is in place, all those remaining are either land plots that must undergo urban renewal or fractured smaller plots that must first be combined to become viable for development. In such cases, it is impossible to begin development on the acquired land plots immediately.

Liao Chao-hsiung, vice president of Highwealth Construction Corp., said land prices have been spiraling upwards and that developers’ basic costs have surged. He claimed that there are no construction companies that have the ability to hoard land, adding that they face many difficulties in the construction license application process, which he called tediously long.

“Based on current costs, if a construction company is unable to obtain a license to begin developing the land within three years, then there is no need for the government to penalize it by repurchasing the land, because the company will most likely already have collapsed by that point,” Liao said. (SB)