"Three Red Lines" is a policy that the central bank and the Ministry of Housing and Urban-Rural Development will restrict the equity financing of real estate developers, and will be fully implemented from 202 1 1. "Three Red Lines" are three specifications for all real estate developers, namely:

1, and the return on equity after excluding advance receipts exceeds 70%;

2. The net debt ratio exceeds100%;

3. The ratio of cash to short-term debt is lower than 1.

The standard of the three red lines of real estate is that the asset-liability ratio is greater than 70%, the net debt ratio is greater than 100%, and the short-term cash debt ratio is less than 1.

First of all, real estate is related to people's livelihood, and the three red lines can effectively control land prices, thus controlling local housing prices and ensuring large-scale housing construction.

Secondly, the three red line standards can prevent the financial crisis. Real estate companies are large-scale. Once the debt is too high, there will be problems in repayment, which will affect the security and stability of the financial system.

Finally, according to the relevant provisions of the Notice of the Ministry of Housing and Urban-Rural Development and other eight departments on continuously rectifying and standardizing the order of the real estate market, the main goal of rectifying and standardizing the real estate market is to strive to achieve a significant improvement in the order of the real estate market in about three years. Violations of laws and regulations have been effectively curbed, the supervision system has been continuously improved, the supervision information system has been basically established, the work pattern of joint management by all departments has gradually taken shape, and the number of complaints from the masses has dropped significantly.

On the basis of these three indicators, the housing planning is divided into four grades, the housing enterprises that step on three red lines are classified as "red grade", the housing enterprises that step on two red lines are classified as "orange grade", the housing enterprises that step on one red line are classified as "yellow grade" and the housing enterprises that do not step on the third line are classified as "green grade".

Legal basis:

"People's Republic of China (PRC) City Real Estate Management Law"

Twenty-fifth real estate development must strictly implement urban planning, and implement comprehensive planning, rational layout, comprehensive development and supporting construction in accordance with the principle of unity of economic benefits, social benefits and environmental benefits.

Twenty-sixth, the acquisition of land use rights for real estate development by means of transfer must be carried out in accordance with the land use and development period agreed in the land use right transfer contract. If the development has not started for one year beyond the date agreed in the transfer contract, the land idle fee equivalent to less than 20% of the transfer fee for land use rights may be levied; If the development has not started for two years, the land use right can be recovered free of charge; However, unless the development is delayed due to force majeure or the actions of the government and relevant government departments or the preliminary work necessary to start the development.