Is this a good idea or not? From what I understand this sort of falls into a grey area, as you do not get the same kind of household registration as you would buying a flat in the city.

Has anyone in here done it? What are the risks involved. Say you buy a farm house, and then several years later the local government wants to demolish the village. Do you get proper compensation, or will they just toss your ass out? Are there any examples of foreigners getting burned like this?

Buying Agricultural land is not allowed. You can rent the land from the farmer but the land title will stay with either the farmer or more likely the village committee.

Renting is your best bet, you should expect the farmer or village committee to raise the rent if local land rents rise, in these cases your rental lease will mean next to nothing.

If you dont plan to do heavy investment then sign a rental agreement but only pay rent a year at a time

This is more or less how I understand it. The land title will stay with the village committee.

However, this does not seem to stop other Chinese or foreigners from "buying" these houses.

You can buy the property but you will never receive a red book for it. The red book will always remain in the hands (name) of the original property owner or descendants. When there are no more descendents then the property is returned to the village.

So the answer is YES, you can buy, but do you really own it if it will never be in your name? Not a very good idea.

This is why most people do long term leases, 10+ years.

I went through this entire process 2 years ago when I tried to purchase a house and some land in Heijing. The owner was very willing to sell but I insisted on getting the red book. He went to 2 different offices and got the same answer - NO Red Book.

I learned a lot about this process and the diff types of deeds so it was well worth the time and money I put into this project.

If you are married to someone with a village HuKou she can, I believe, buy land. In Shanghai a trend developed of men with a Shanghai HuKou looking to marry village girls. They realised that they could spend a life working in Shanghai and only have a small apartment at the end of a career. However, the boys from the villages, could end up with a large house in the countryside on much lower incomes. The village girls would buy the land to build the house, and the boy would provide the cash to build. In return the girls would also get access to all of the benefits of being married to someone with a Shanghai HuKou.

I have a feeling that buying land under a house is different to buying agricultural land. But I believe you have to put the land to use within 3 years or it goes back to the government.

If I were buying a farmhouse, I would make sure it is not on land that is going to be developed in the near future. If you are buying from someone who could be in the know (insider info) I would be cautious, unless your family knows someone in the know.

If you are going to live out in the sticks, be aware of security. You will notice that many home owners in the villages have big dogs. My brother-in-laws neighbour has about 6 dogs, a high wall (3m) around the compound and a locked solid steel gate. I also here that some expats living in Dali have suffered multiple break-ins, as people assume they are rich. And perhaps if you are spending more than a dollar a day, have a tablet/laptop and phone, you are comparatively rich.

Not any village Hukou but only for that specific village only. In the Chinese patriarchal system, the descendents are only male. Only surviving spouses of deceased males may inherit land or their children. There are cases where females inherit title to land but the norm is for the males.

Forgot to mention, 'specific to that village', sorry. Inheritance through male line normally, seems about right. However, I am pretty sure that females can buy land, if only for developing, that is what the Shanghai boys were doing.

Thanks everyone for their their very informative input. I was already somewhat skeptical about such a purchase, but this really turned me off the idea. My wife actually is from a village, but unfortunately not from Yunnan. I guess I will forget about trying to save a few pennies and just focus my efforts on purchasing a villa.

Darn. One thing I'd always like is a nice village retreat somewhere with a little land.