China Commercial Real Estate Tax (Lease Renewal) Is Here: >=70% of Land Price

The land price for renewal shall not be lower than 70% of the benchmark land price of the city at the same grade level as the renewed parcel; it could be 80% or 100%. finance.eastmoney.com Shanghai Implements New Policy on Renewal of Industrial and Commercial Land Use Rights, Price "Not Lower Than 70% of Benchmark Land Price"; Industry Insiders: Clearing Bottlenecks for REITs Issuance _ East Money How to renew land use rights for industrial and commercial projects now has a unified operational standard in Shanghai. Recently, The Paper learned from the Shanghai Municipal Planning and Natural Resources Bureau that the "Guiding Opinions on the Renewal of Land Use Rights for Industrial and Commercial Projects in Shanghai (Trial)" (hereinafter referred to as the "Guiding Opinions") has been officially issued. The implementation of this new Shanghai policy is also an important local-level practice of carrying out the central government's arrangements. What China calls buying a house and real estate is actually a long-term lease, a long term lease, holding it for the government for 40 years or 70 years. The policy is favorable to social mobility and fairness. This time, the easy money for landlords and landladies is coming to an end. A simple calculation example: Suppose you own a 50-square-meter commercial-residential apartment or small shop in a core business district of Shanghai (such as Xujiahui or Jing'an Temple, a high-grade location), the 40-year property right has just expired, and you plan to renew it for another 40 years. Check the benchmark land price: Assume that the government-published "benchmark floor land price" for commercial land in this area is 30,000 yuan/square meter (the benchmark land price is uniformly set by the government and is usually far lower than the actual market transaction price of second-hand housing). Calculate the 70% floor: 30,000 yuan × 70% = 21,000 yuan/square meter. Calculate the total cost: 50 square meters × 21,000 yuan = 1,050,000 yuan (1.05 million yuan).