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In 2024, Beijing received about *** billion yuan in land transfer fees. As China's second most prosperous city, Beijing's real estate market remained one of the most vibrant in the country. Other economic hubs such as Guangzhou, Shanghai, and second-tier cities such as Hangzhou and Wuhan also generated high incomes from land transfers. 

High dependency on land transfer revenues

Many city administrations in China are increasingly dependent on land transfer revenues. In 2021, 12 major Chinese cities’ annual land transfer fee revenue was higher than their local general public budget revenue. This trend is mainly caused by the increasing expenditure and a lack of tax autonomy of regional governments, as well as the inability of many provincial cities in generating income through other means.

An unaffordable housing market

The reliance of local authorities on land transfer incomes led to the so-called “Land Finance” in China. Since the housing reform of 1998, the real estate sector developed substantially and became one of the pillar industries of the Chinese economy. Although measures were taken to mitigate the price rises, the average cost of real estate multiplied since 2000, and housing in certain regions became exceptionally unaffordable for residents.