Generally speaking, the interest on borrowing money to buy land does not need to be capitalized. Because the land is the transfer of the right to use, there is no construction period. The formation of the right to use is an examination and approval procedure. There is no construction period for purchasing land.

The loan interest during the construction period can be capitalized. The loan interest of the land purchase fee is not allowed to be capitalized, because the land purchase fee is a one-time behavior and has no process. China stipulates that the first condition of capitalization is that there is a construction period, and only when the construction period is long can capitalization be allowed.