When the lease on the land on which one's house is located expires in China, how does the renewal work and how is its cost determined?

A real estate can be divided into two parts, the land and the building. You have permanent and perpetual right on the building of your own.

In China, there are two kinds of lands, one of which is called State-owned land (SoL for short), the rest is called Collectively-owned land (CoL for short).

SoL is owned by the whole population of China and managed by the local government, while CoL is owned collectively by local communities and managed by local authorities, such as a villager committee. The land cannot be owned by individuals and/or corporations.

To build on SoL you need to EITHER purchase the Land Use Right (LUR for short) from the local government，OR ask the local government allocate some land for you. LUR of the leased land expires sooner or latter. Although the allocated land does not expire, the allocator could withdraw LUR any time.

To build on CoL, if you are not a member of the local community, you need to ask the local government to purchase it from the local authority and make it SoL first. However, if you are a member of the local community, you don't need to obtain LUR from anybody, hence there is no such thing as 70-year expiration.

SoL used for residences, LUR of which is automatically renewed, but the residents are bound to pay for the renewal of LUR. SoL used for other purposes, LUR of which is NOT automatically renewed. The local government can stop leasing the land to you. The cost varies across the nation in China. You need to make contact with the local government to get more details.

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Update:

The maximal expiration of LUR varies according to the usage of the land:

It means that the local government/council could legislate shorter expiration of LUR.

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Update 2:

The local council/government (from province-level to city-level) legislates how the cost to obtain LUR of SoL should be calculated, whether the cost of the renewal should be discounted.

I did some research on Baidu, there are a few formulae to calculate the cost to obtain LUR of SoL for residential purpose:

1. Cost = Land_Area × 5 × Fee_Rate_per_year_per_area × Plot_Ratio [source]
2. Cost = Land_Area × Baseline_Land_Price × 10% × Actual_Plot_Ratio ÷ (Average_Plot_Ratio × 1.5) [source]

Where, Land Area is measured by square meter; Plot Ratio is the ratio of a building's total floor area (gross floor area) to the size of the piece of land upon which it is built; Fee Rate (per year per area) is the key in this formula, which varies, as is mentioned above, across the country.

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Update 3:

The baseline land price of residential SoL in two famous cities IMHO:

Beware that the baseline land price is not the cost to obtain SoL LUR, but a factor in the calculation in some cities, as demonstrated in Update 2.

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Reference:

• 《中华人民共和国民法典》第三百五十九条
• 《中华人民共和国城镇国有土地使用权出让和转让暂行条例》第十二条
• 《协议出让国有土地使用权规定》第五条