


































Economics, Law and Policy 
ISSN 2576-2060 (Print) ISSN 2576-2052 (Online) 

Vol. 8, No. 2, 2025 

www.scholink.org/ojs/index.php/elp 

206 
 

 

Original Paper 

A Study on the Legal Implementation Mechanism for the 

“Separation of Three Rights” of Rural Homesteads in China 

Jinqiu Geng
1
 

1
 Dalian Ocean University, Dalian, Liaoning, China 

 

Received: October 2, 2025     Accepted: October 15, 2025    Online Published: October 16, 2025 

doi:10.22158/elp.v8n2p206               URL: http://dx.doi.org/10.22158/elp.v8n2p206 

 

Abstract 

Thanks to China’s rurally focused reforms, “Three Rights Division” on rural homesteads came by – 

dividing collective ownership, household qualification and flexible use rights – an important policy 

meant to tackle inefficient problems within the rural system and make economic value come out of the 

land. This reform is about invigorate the sleeping rural assets, raise up the farmers’ property income 

and make the rural-urban integration possible. But the fact is that its success is seriously limited 

because there is an incomplete and unclear legal environment. This paper makes a critical review on 

the legal realization mechanism for this reform. It starts from explaining the theoretical and practical 

significance of separated ownership, qualification, and use rights to build a concept foundation for the 

following analysis. Then, it probes into the current legal landscape of land expropriation and 

acquisition and determines some prominent problems like vague property right conceptions, excessive 

constraints on market circulation, non-unified or ineffective registration systems, and unscientific 

valuation and dispute settlement. In view of the results from all the national pilot programs, the paper 

synthesizes practices and lessons. According to this exhaustive analysis and puts forth a systematic 

legal implementation mechanism: Key recommendations are to improve existing laws on the content 

and boundaries of each right, to develop an integrated and unified national registration and 

certification system, which provides legal certainty for such exchange transactions, to develop a 

hierarchical and regulated secondary market for the transfer of use rights (e.g., the stock and option 

exchanges), as well as an open and transparent system for valuing assets and distributing profits. The 

paper holds that to build a strong legal architectural system is not just a technical must do, it’s also a 

primary pre requisite to guarantee the reform success, protect farmers’ interests and realize the goal of 

rural revitalization strategy. 

 

 



www.scholink.org/ojs/index.php/elp                   Economics, Law and Policy                        Vol. 8, No. 2, 2025 

207 
Published by SCHOLINK INC. 

Keywords 

Rural Homestead, Three Rights Separation, Land System Reform, Property Rights, Legal Mechanism, 

China 

 

1. Introduction 

The rural homestead system has been a key part of China’s rural social and economic structure for a 

long time, supplying housing security for many generations of farmers. At the same time, it is an 

important factor of rural collective economy. Rooted in the dual urban-rural land system, both rural 

homesteads and land are collectively owned. Urban land is owned by the state (Yin, C., 2020). 

According to this system, the rural collective members have the right to use a piece of land from the 

collective to construct their own housing, but historically, this right is inalienable and thus cannot be 

used for economic gain. On the other hand, rapid urbanization and industrialization in the last few 

decades has greatly changed Chinas demographic picture. An unprecedented mass exodus of people 

from rural areas to urban areas has led to a great number of homesteads that have been left unused and 

underutilized forming so called “hollow villages”. This is nothing but the biggest waste of land assets 

as well as a huge amount of idle asset which a farmer can’t capitalize on. Ownership, qualification, 

usage rights were tightly bundled together, which was a big stumbling block that prevented efficient 

resource allocation, farmers unable to derive the full property value of their homesteads thereby 

hampering overall rural development Facing such challenging situations, we can see that the Chinese 

central government is determinedly taking the path of separation of three rights reform to break away 

from collective ownership rights, members’ qualification rights, and members qualification and 

derivative right (Fan, C. Q., & Mao, Y. Y., 2020, pp. 44-50). The new policy wants to keep the ground 

of everyone together, but let farmers have more room to move their land and sell it if they want, which 

means more people can buy farms and houses, make farm money, and help villages be better places to 

live. To achieve my goal in this essay, I will make a thorough research on the entire process of legal 

implementation of this policy from legal realization to realize the purpose of this policy. Analyzing the 

theoretical basis for legal realization, understanding existing legal bottlenecks, and providing a 

systematic framework for its legal implementation. 

 

2. Theoretical Framework and Connotation of the “Three Rights Separation” 

The policy of separating three rights on the rural homestead is an important institutional innovation 

based on the theory of property right in order to adapt to the land system in China under new 

socio-economic conditions. It is a thorough breakdown, transforming the previously monolithic 

homestead into a newer, more refined structure consisting of three distinct but inter-linked rights; i.e., 

ownership right, qualification right and use right. The ownership right belongs to the rural collective 

economic organization, which strengthens the socialist public ownership of land as stipulated in 

China’s Constitution. This right is absolute and fundamental and serves as the basis from which other 



www.scholink.org/ojs/index.php/elp                   Economics, Law and Policy                        Vol. 8, No. 2, 2025 

208 
Published by SCHOLINK INC. 

rights flow: the main function is to serve the collective’s interests, preventing the land’s loss or misuse, 

and enabling the collective to conduct macro supervision of homestead distribution and use (Liu, S. J., 

2024). The qualification right is a new and important concept in this framework, legally belonging to 

the members of the rural collective. It’s a status-based right, tied to a person’s membership of a 

collective, and is a social function and security function of the homestead system. This right is an 

individual’s qualification to submit and acquire a homestead from the collective for residential 

purposes, serving as a core guarantee of residential housing. But its legal definition is a difficult matter, 

mainly with regard to the acquisition, inheritance, and extinction of personal rights within population 

mobility and changing families. Finally, the use right is also the most dynamic part of the reform. It 

includes the right to occupy, to build, and to use the homestead and the attached house, most important 

of all, it is intended to be separable from the qualification right (Wang, X. S., Yang, Y. H., Li, N., & 

Guo, Z. X., 2024, pp. 178-188). This separation makes the use right movable, transmissible, and 

transferable, so farmers can use their housing as an asset in the market without losing the most 

important fundamental qualification right of being a member. This flexibility leads to the revitalization 

of idle resources and changes homesteads from simple consumption products to income-earning capital 

assets. 

 

3. Current Status and Challenges of the Legal Implementation 

Although in the policy guidance there was, yet the “three rights separation” legal realization on rural 

homesteads still comes across with considerable troubles and it operates under a transitional and 

sometimes obscure legal situation. The primary legislative basis, the Land Administration Law ofthe 

People’s Republic of China, has been revised to conform to these new reforms, but these reforms are 

still lacking as there is still not a detailed provision in the law to clearly delineate the rights being 

separated as well as the contents and boundary of the new rights separated. This legal ambiguity is a 

root cause of many practical problems (Gao, S. P., 2025, pp. 1-13). One of the most prominent 

problems is the vague definition of the qualification right. The law doesn’t give much idea about how 

this right could be figured out for people who have migrated to cities but still have a hukou in the 

countryside, or for their children, so there are often arguments over who gets what to inherit. Another 

major barrier is the high market circulation barriers to the use right. Current regulations and pilot 

program policies limit the circulation of homestead use rights to members of the same collective or 

restrict the transfer of homestead use rights to outsiders with strict conditions, blocking the 

development of a larger and more competitive homestead use rights market. There won’t be sufficient 

market demand for a homestead if there isn’t any, so its potential economic value can’t be unleashed. 

This is complicated by the absence of a unified, comprehensive, and open register and certificate. We 

need a strong system for getting a framework that gives protection in the law, watching property, 

moving it around, and swapping (Xue, Z. J., & Mi, Y. S., 2025, pp. 1-14). Currently the registration 

system is divided into parts so it does not record which rights have been separated and therefore makes 



www.scholink.org/ojs/index.php/elp                   Economics, Law and Policy                        Vol. 8, No. 2, 2025 

209 
Published by SCHOLINK INC. 

potential investors and creditors reluctant to deal as the risks seem too high. These problems are shown 

in table 1, which lists the main difficulties hindering the reform. 

 

Table 1. Key Challenges in the Legal Implementation of Homestead Three Rights Separation 

Challenge 

ID 

Key Challenge 

Area 
Description of the Challenge 

C1 
Vague Legal 

Definitions 

The legal content, boundaries, and rules for inheritance and transfer 

of the qualification right and use right are not clearly defined in 

national laws. 

C2 
Restricted Market 

Circulation 

Strict limitations on the scope of transferees (e.g., limited to within 

the same collective) prevent the formation of an open and 

competitive market. 

C3 

Imperfect 

Registration 

System 

Lack of a unified national system for registering the separated 

rights, which undermines transaction security and prevents 

effective mortgaging. 

C4 

Absence of 

Valuation 

Standards 

No scientific, standardized, and fair mechanism exists for valuing 

homestead use rights, leading to price disputes and potential 

exploitation of farmers. 

C5 
Inadequate Dispute 

Resolution 

The legal procedures for resolving conflicts arising from homestead 

transfers, leases, and compensation are unclear and often 

inefficient. 

 

4. Analysis of Pilot Program Outcomes 

Since 2015, the Chinese government has launched many pilot programs in different parts of the country 

to try out ways to reform the homestead system. These tests have been key test zones, accumulating 

much practical knowledge, pointing out difficulties applying “Three Rights Separation,” models tested 

are very different due to local economy and growth priorities, seen in Table 2. For example, in Deqing 

County, Zhejiang, a pioneer in this field, the focus has been on building an all-around market-based 

system, which supports the transfer, lease, mortgage, etc., of homestead use rights and is based on a 

powerful local rural property rights trading platform. This has successfully achieved social capital to 

construct tourism and the elderly care facilities (Yang, J. R., 2025, pp. 112-117). But other regions 

have taken to voluntary withdrawal models that pay money to the farmers who have settled in the city 

permanently, thereby enabling them to relinquish the family homecoming back to the collective for 

replanting or redevelopment. The result on these pilots was both good and bad. As shown by the 

hypothetical information in table 3, places with a robust non-agriculture economy and a high demand 

for rural land, such as for tourism or suburban living, have had much success in reviving these idle 

homesteads and raising farmers’ incomes. These areas have proved to be effective with the market 

mechanism. But in less developed agricultural areas, there is little interest in transferring use rights, and 

the withdrawal compensation model often fails since the collective does not have much money 

available to cover the cost. One common lesson among all pilots is that success depends on having 

strong guidance from governments, clear, transparent rules about how things work, and setting rules for 

sharing rewards so that farmers get a fair piece when land’s worth goes up (Wang, Z. Q., 2025, pp. 

34-36). These roadblocks, problems like hard valuations and fights over moving processes, all head 



www.scholink.org/ojs/index.php/elp                   Economics, Law and Policy                        Vol. 8, No. 2, 2025 

210 
Published by SCHOLINK INC. 

back towards a complete and matching national law system that would help with and give shape to 

these local experiments. 

 

Table 2. Comparison of Homestead Reform Pilot Models in China 

Pilot 

Region 
Model Focus Key Outcomes Main Obstacles Encountered 

Deqing, 

Zhejiang 

Market-based 

Transfer and 

Mortgage 

Established a rural property rights 

trading center; increased farmer 

income through leases and 

transfers. 

Initial difficulties in property 

valuation; balancing 

development with 

environmental protection. 

Yiwu, 

Zhejiang 

Aggregated 

Transfer for 

Industrial Use 

Facilitated consolidation of land 

for small and medium-sized 

enterprises, promoting local 

economic clusters. 

Complex negotiations with 

numerous households; 

ensuring equitable 

compensation. 

Jinzhai, 

Anhui 

Voluntary 

Withdrawal with 

Compensation 

Linked homestead withdrawal 

with poverty alleviation 

programs, providing funds for 

resettlement. 

Insufficient compensation 

standards to incentivize 

withdrawal; lack of follow-up 

support. 

Liuyang, 

Hunan 

Tourism and 

Cultural 

Development 

Attracted external investment to 

convert idle farmhouses into 

guesthouses and cultural centers. 

Conflicts over profit 

distribution; ensuring 

long-term sustainability of 

projects. 

 

Table 3. Statistical Overview of Idle Homestead Revitalization in Selected Pilot Areas (2020-2024) 

Pilot Area 

Number of Idle 

Homesteads Revitalized 

(Units) 

Average Increase in 

Household Income (per 

annum) 

Primary Revitalization 

Method 

Deqing 

County 
2,150 ¥25,000 

Market Transfer and Lease 

(Tourism) 

Jinzhai 

County 
3,500 

¥50,000 (one-time 

compensation) 

Voluntary Paid 

Withdrawal 

Liuyang 

City 
1,800 ¥18,000 

Lease to External Entities 

(Guesthouses) 

Yiwu City 1,200 ¥30,000 
Collective Repurchase and 

Redevelopment 

 

5. Constructing a Comprehensive Legal Realization Mechanism 

After identifying the problem and having experience through trial process, it is necessary to create a 

good legal realization system. This must be a mechanism all the way. From the definition of rights 

down to the dispute resolution mechanism. The first important step is to amend the Land 

Administration Law as well as related laws and regulations for clear and specific ownership, 

qualification and use rights definition. The law should lay out the range of every right, the situations 

under which they can be exerted, and the rules regarding how they interact with one another. For 

instance, the conditions for inheriting or transferring the qualification right need to be clarified, and the 

specific entitlements of the use right—such as its duration, renewal possibilities, and the rights to 

develop and profit from the land—must be legally enshrined (Gao, S. P., & Zhao, Z. C., 2025, pp. 

15-28). Secondly, creating a nationwide unified real estate registration system for all separated 



www.scholink.org/ojs/index.php/elp                   Economics, Law and Policy                        Vol. 8, No. 2, 2025 

211 
Published by SCHOLINK INC. 

homestead rights is necessary. This system has to be able to very clearly record who owns what, who 

has what qualification rights, and what the use rights look like, whether they got transferred, leased, or 

mortgaged. Such a setup would give unshakable legal proof of rights, slash the chances of deals going 

astray, and be the basic building block for a functioning homestead marketplace. On this basis, the 

construction of regulated, multi-level market system for the circulation of homestead use rights is 

needed. It can allow for smooth, low-restriction transfers between members of the collective, as well as 

set clear, transparent transfer rules when transferring to an outside body (Zhang, S. T., & Zhao, Y. X., 

2025, pp. 76-81). These regulations have to reconcile economic vitalization goals with the need for 

food security and prevention of speculative real estate bubbles. If official rural property rights trading 

platform is built up at county level or municipal level, it could make transparent and convenient 

transactions (Wanjun, 2025, pp. 63-74). And for this market, we need a fair and scientific valuation of 

assets, which requires governmental guidelines to consider factors such as a building’s location, size, 

access to infrastructure, and potential for development, so that farmers get value for what is theirs. 

Proposed Law Framework Table 4. 

 

Table 4. Proposed Legal Framework for Homestead Use Right Transfer 

Key Area Proposed Legal Rule Expected Outcome 

1. Clarification 

of Rights 

Amend the Land Administration Law to 

explicitly define the content, duration, and 

scope of the use right, and the inheritance rules 

for the qualification right. 

Provides a clear legal basis for all 

transactions, reducing ambiguity 

and disputes. 

2. Unified 

Registration 

Mandate the inclusion of separated homestead 

rights in the national unified real estate 

registration system, issuing distinct certificates 

for each right. 

Enhances legal certainty and 

security for all parties; enables 

effective mortgage and financing. 

3. Market 

Regulation 

Establish a regulated, multi-tiered market. 

Allow open transfers to certain entities (e.g., for 

tourism, agriculture) under zoning and use 

regulations. 

Creates a vibrant yet orderly 

market, balancing economic 

efficiency with social and 

environmental goals. 

4. Valuation 

System 

Develop and legislate a national standard 

framework for homestead valuation, managed 

by certified, independent third-party assessors. 

Ensures fair pricing in transactions, 

protects farmers from exploitation, 

and provides a basis for taxation 

and credit. 

5. Income 

Distribution 

Legally stipulate a clear formula for distributing 

proceeds from transfers among the farmer, the 

collective, and a public fund for rural 

infrastructure. 

Guarantees farmers receive the 

primary benefit while supporting 

sustainable community 

development. 

6. Dispute 

Resolution 

Create specialized arbitration panels or judicial 

procedures for resolving homestead-related 

disputes quickly and efficiently. 

Provides accessible and effective 

legal recourse, building confidence 

in the market system. 

 

 

 

 

 



www.scholink.org/ojs/index.php/elp                   Economics, Law and Policy                        Vol. 8, No. 2, 2025 

212 
Published by SCHOLINK INC. 

6. Conclusion 

The “Three-Right Separation” of rural homesteads is a grand and necessary change to China’s land 

tenure system, with huge promise to invigorate rural economies, narrow income disparities between 

cities and countryside, and accelerate national rural revitalization. It is a reform to balance the basic 

principle of collective ownership with the people’s increasing demand for personal ownership and the 

requirement of market-oriented allocation of resources. But this paper shows that these laudable aims 

ultimately fall short because of the lack of a clear and adequate legal framework. It reveals very 

important bottleneck factors, there is a problem with the clear legal definition in distinguishing them 

after separation (the right of use and the right of disposition) can’t have their market circulation and 

they don’t really have a good unification on its records. A fair valuation for the asset itself or how to 

deal with problems, or disputes. And after many large scale pilot programs we see that even though 

local attempts can be partly successful, they will have legal deficiencies that create uncertainty. 

Therefore, the creation of a comprehensive, coherent, and enforceable legal realization means is not a 

choice, but a necessity. This would require tough legislative changes in national law, developing a 

strong registration system, creating a regulated and transparent market, and making sure the benefits 

from the change are spread around. China can make its rural homesteads from sleeping liabilities into 

live assets by forming this strong legal base, empowering farmers and opening paths for an even better, 

richer, and greener rural future. 

 

Reference 

Fan, C. Q., & Mao, Y. Y. (2020). The Dynamic Evolution of the Rural Homestead Property Rights 

System and Its Theoretical Logic. Journal of Sichuan Normal University (Social Science Edition), 

47(03), 44-50. 

Gao, S. P. (2025). Policy Implications and Institutional Reflection on the Pilot Reform of Rural Land 

Expropriation System. Journal of Central South University (Social Science Edition), 31(05), 1-13. 

Gao, S. P., & Zhao, Z. C. (2025). The “Separation of Three Rights” in Homestead Land: Issues and 

Prospects. Agricultural Economics, 2025(Z2), 15-28. 

Liu, S. J. (2024). Research on the Improvement of Homestead Use Rights System under the Concept of 

“Separation of Three Powers”. Supervisor: Dai Jianting. Zhejiang Normal University, 2024. 

Wang, X. S., Yang, Y. H., Li, N., & Guo, Z. X. (2024). Reconstructing Rural Land Property Rights: 

Paths and Forms. China Population Resources and Environment, 34(02), 178-188. 

Wang, Z. Q. (2025). The Dilemma and Countermeasures of the “Three Rights Separation” Reform of 

Rural Homesteads under the Background of Comprehensive Rural Revitalization. Housing and 

Real Estate, 2025(21), 34-36. 

Wanjun. (2025). The Policy Logic and Practical Exploration of the “Three Rights Separation” Reform 

of Homestead Land. South China Sea Law, 9(01), 63-74. 

 



www.scholink.org/ojs/index.php/elp                   Economics, Law and Policy                        Vol. 8, No. 2, 2025 

213 
Published by SCHOLINK INC. 

Xue, Z. J., & Mi, Y. S. (2025). Deepening the Reform of Land Management Rights: Legal Nature and 

Institutional Framework. Journal of South China Agricultural University (Social Science Edition), 

24(05), 1-14. 

Yang, J. R. (2025). Another Remarkable Contribution to the Study of Rural Homestead 

Issues—Review of “Research on the ‘Three Rights Separation’ of Rural Homesteads and Its 

Realization Path under the New Development Pattern”. Journal of Chengdu Normal University, 

41(05), 112-117. 

Yin, C. (2020). Research on the “Three Rights Separation” System of Rural Homestead Land. 

Supervisor: Wei Yihua. Jilin University, 2020. 

Zhang, S. T., & Zhao, Y. X. (2025). Type-based Governance Strategies for Rural Homestead Land 

under the “Separation of Powers” Framework: An Analysis Based on Farmer Differentiation and 

Location Differences. Journal of Zhengzhou Municipal Party School, 2025(01), 76-81. 

 


