It is an important policy instrument to re-define the three forms of property rights of rural homestead in China. In order to realize the strategy of rural vitalization, the Chinese government aims to re-identify ″three forms of property rights″ of homestead, which are the ownership of rural homestead land, right to use of rural homestead land, and the qualification right of homestead in rural areas. The rural homestead policy expects to ensure the basic living needs of rural households by confirming the homestead qualification right; meanwhile, this policy is expected to be applied as a guarantee mechanism of rural homestead in respect of real right issues, so as to improve the utilization efficiency of the homestead, collective construction land and collective land. There are wide arguments on: how to define the ″three rights″ of the homestead in China’s rural areas; how to distinguish the boundary between the ″three rights″; how to design the relevant land-management systems in China’s rural areas. The academic disputes on the above topics have been widely discussed by Chinese scholars and practitioners from different aspects, in different regions and at different levels. The material interests and yields of rural homestead are the essentials of reforms on rural homestead. In the past, the law of China only stipulated the ownership and right to the use of homestead, and it has not stipulated the right of homestead qualification. At the same time, there was no clarification of the relationship between the three rights of homestead. This resulted in conflicts of interests in rural land, among the individual, collective and state. The interest conflicts of the homestead have been found at different levels and among different stakeholder groups. The conflict of interests between individuals and collectives mainly involves the question of whether the homestead is paid rent or free-of-use, whether the use of homestead should be restricted by national laws or regulations, whether the homestead can be divided and traded in the market. The conflict between individuals mainly involves how to guarantee the villager’s qualification right, whether the heir’s qualification can be recognized by laws etc. The conflict of interests between collectives and states mainly involves problems such as the scope of the ownership, and whether the owner of collective lands should supply public services. In order to resolve conflicts of interests of rural homestead between the individual, collective and state, and clarify the relationship between three forms of property rights of rural homestead, the principle of minimizing the cost of housing land could be applied under the requirements of the rural revitalization strategy, the optimization principle of ″tertiary industry″ land allocation and the principle of maximizing the comprehensive benefit of collective land. Among them, the principle of minimizing the cost of housing land means that the rural collective should guarantee the basic housing demand of villagers with the minimum land cost. Rural collective is allowed to retain the villagers homestead, but the land had to be well-managed by village authorities through unified planning, unified construction of the security housing requested by the rural collective economic organizations in accordance of national spatial planning, their own financial conditions, land assets value, population size etc. The principle of optimization of land allocation of tertiary industry land refers to the trade, replacement and exit of the right to use rural homestead, and the optimal allocation of tertiary industry land in rural areas should be realized, according to the requirements of local or regional agricultural and rural development, and the agricultural output should be maximized with limited collective lands. The principle of maximizing the comprehensive benefit of collective land means that the relationship between rural land development and utilization should be handled on the basis of fair treatment of economic, social and environmental benefits, so as to protect the ecological environment and natural features of rural areas, promote the healthy development of rural society and realize the maximization of collective land comprehensive benefits. The reform of rural homestead should be implemented in accordance with the strategy of rural vitalization, by distinguishing the boundary between different forms of property rights. The policy instruments on homestead qualification right system, the right to use system and the ownership systems should be designed and implemented, by applying the principle of minimizing the cost of housing land, the optimization principle of land allocation of ″tertiary industry″ and the principle of maximizing the comprehensive benefit of collective land, so as to fulfill the different interests of various stakeholders in related to the rural homestead. The system of homestead qualification right should make clear the acquisition, exit and guarantee of homestead qualification right; The right to use of the homestead should include the acquisition, trade and rental; The ownership system should stipulate the management of rural collective land planning and management of rural collective land.