Published by ChinaMNC · Nimu

Xuzhou Issues New Rules for Compensation on Collective Land: What Foreign Founders Need to Know

Xuzhou's new measures on compensation for houses on collective land affect site acquisition and relocation. Foreign founders should understand procedures, compensation standards, and timelines before investing in the area.

Xuzhou Introduces New Rules for Compensation on Collective Land

The Xuzhou Municipal Government has issued new measures governing compensation for houses on collective land within the urban area (excluding Tongshan and Jiawang districts). The measures, effective from February 3, 2026, aim to standardize expropriation and protect owners' rights. For foreign founders considering setting up a company or investing in Xuzhou, these rules affect how land and buildings can be acquired or used, and what to expect if a site is subject to expropriation.

Scope and Key Definitions

The measures apply to compensation and resettlement for expropriation of houses on collective land in the designated urban area. The "expropriated person" is defined as the owner of the house on collective land. Foreign founders should note that collective land is typically owned by rural collectives, and direct acquisition may be complex; however, if you lease or operate on such land, the rules on compensation and relocation may impact your business.

Administrative Responsibilities

The municipal natural resources and planning department supervises land expropriation, while the housing and urban-rural development department oversees house expropriation. District governments are responsible for implementation within their jurisdictions, with designated expropriation departments handling specific tasks. Other departments, sub-district offices, and village committees assist as needed.

Principles: Compensation Before Relocation

The measures emphasize that compensation must be paid before relocation, and compensation funds must be fully in place, stored in a dedicated account, and used exclusively for that purpose. Once a pre-expropriation announcement is issued, new construction, renovation, expansion, or changes to land use are suspended.

Compensation Plan and Public Consultation

District governments must draft a compensation and resettlement plan based on land surveys and social stability risk assessments. The plan must include: scope and timing, compensation and resettlement methods, standards for various compensations and rewards, signing period, transition arrangements, relocation period, and location and settlement standards for resettlement housing. The plan must be publicly announced for at least 30 days in the affected area and on the district government website, with a clear method for submitting opinions. If more than half of the affected collective members object, a hearing must be held; if less than half but some object, a hearing may be held if deemed necessary. The plan may be revised based on feedback.

Eligibility for Compensation

Individuals who move their household registration into the area due to birth, marriage, military service, retirement, education, or release from prison, and who meet household registration rules, may receive compensation and resettlement on the same terms as collective members.

Determining Legal Building Area

Compensation is based on the legal building area, typically as recorded in the property ownership certificate or real estate registration certificate. If only a homestead certificate or rural construction land permit exists, the legal area is determined as follows: if the actual area is less than 1.4 times the certified area, the actual area is used; if it is equal to or greater than 1.4 times, the area is capped at 1.4 times the certified area. Any excess is not recognized. If no certificates exist, the district government first confirms the homestead rights and area, then applies the above method.

Exclusions from Compensation

Illegal construction, temporary buildings that have exceeded the approved period, and any new construction, renovation, or expansion carried out after the pre-expropriation announcement are not compensated or resettled.

Compensation Options

Expropriated persons may choose monetary compensation or property exchange. For monetary compensation, an appraisal agency evaluates the house value. Alternatively, a "home purchase card" similar to state-owned land policies can be used to buy new commercial housing. For property exchange, the resettlement area is based on the recognized building area, and settlement follows the rules for state-owned land expropriation. Appraisal agencies are selected by the expropriated persons through negotiation; if no agreement is reached within the deadline, the expropriation department organizes a lottery with notarization.

Non-Residential and Mixed-Use Properties

For non-residential houses, compensation for suspension of business is provided, with standards referencing those for state-owned land. If residential property is used for non-residential purposes, it is treated according to "residential-to-non-residential" standards for state-owned land. However, if the residential house is rented or lent to others for non-residential use, it is still considered residential, and the tenant or borrower is not entitled to resettlement or compensation.

Transition and Moving Subsidies

The compensation agreement must specify the transition period for both immediate and future housing. If the expropriated person arranges their own transition housing, a temporary resettlement subsidy is paid. Moving expenses are also paid based on the legal building area.

Dispute Resolution and Enforcement

If no compensation agreement can be reached within the expropriation period, the district government may issue a compensation decision for individual cases. If the expropriated person neither applies for administrative reconsideration nor files a lawsuit within the statutory period and refuses to relocate, the district government may apply to the court for enforcement.

Implications for Foreign Founders

Foreign founders planning to establish a presence in Xuzhou should be aware that land use rights and property ownership may be affected by expropriation. Due diligence on land status is essential. If your business operates on collective land, understand the compensation procedures and timelines to mitigate disruption. The rules provide a framework for compensation, but navigating them requires local expertise.

This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.

For assistance with company registration and operations in China, foreign founders can contact ChinaMNC on WhatsApp / WeChat at +86 153 1898 8535.