20 May Buying a House in China
Buying property often is the next step after settling down in China. However, foreigners often run into several problems in their search for a new home. Prepare yourself by keeping up-to-date with the housing market trends and regulations. This is what you need to know:
There is no private ownership of land in China. One can only obtain rights to use land. A land lease of up to 70 years is usually granted for residential purposes. Foreigners who have worked or studied in China for at least a year are allowed to buy a home. Foreigners go through supervision procedures for about a week before they are allowed to buy properties in designated areas.
Foreigners cannot be landlords. Property ownership for investment by foreign companies and individuals are prohibited. Chinese living overseas and residents of Hong Kong and Macau are exempt from these restrictions.
There are two kinds of property titles:
- Use Rights – lease rights to the property.
- Free Hold – has ownership rights to the property.
It is important to hire a lawyer, especially if the buyer is not familiar with the real estate system in China.
It is the responsibility of the seller or the developer to provide the following certificates:
- State Land Use Certificate (Guoyou Tudi Shiyong Zheng)
- Construction Land Planning Certificate (Jianshe Yongdi Guihua Xuke Zheng)
- Construction Project Planning Certificate (Jianshe Gongcheng Guihua Xuke Zheng)
- Construction Project Commencing Certificate (Jianshe Gongcheng Kaigong Zheng)
- Sales Certificate (Xiaoshou Xuke Zheng)
There are three procedures to register property, which can take around 32 days to complete.
Requirements for a foreigner
Many of the requirements for buying a house in China are exactly the same as in the aforementioned article. The following are some minor changes regarding the processes of purchasing a house in China:
1. You will need to have worked or studied in China for at least a year. To confirm this, you will require a certificate from the Public Security Bureau. Please bear in mind that you are only permitted to own one property across the whole of China, which is to be used only for self-residential purposes only. A written declaration needs to be obtained to prove that you currently do not own a property in China.
2. The policy of loans and mortgages for foreigners changes constantly. Technically it is possible to obtain a mortgage as a foreigner, but in reality many Chinese banks will raise several obstacles before you can actually complete this process. During the sales process, common practice is a minimum downpayment of 30% of the sales price. In addition, prepare for several extra costs and taxes; stamp duty (0,5%), deed tax (3-5%), notarization fee (0,3-1%), sales commission (0,5-3%).
3. As a foreigner, keep in mind that the contract needs to be legalized and approved by the government. A visit to the Deed and Title Transferring Office needs to be made to transfer the title of the property to your name.
4. Typically, brand new homes in China are often unfinished upon completion: only essentials are provided, such as doors and windows. Upon purchasing the home, it will be your duty to complete the interior design.
With regards to investing and purchasing a home in China, the law is exactly the same for foreign couples and foreign individuals.
How can a mixed couple buy a house in China?
In China, a mixed couple is defined as a couple where one partner is a native Chinese citizen and the other is a foreign national. Regulation for this type of couple is not too different from the regulation set for foreigners wanting to purchase a home in China.
Firstly, the basic regulation is that the foreign partner has worked in China for at least one year. Individuals must go to the local Municipal Bureau of Public Security where evidence can be provided as proof of previous year-long residency, be it study or work, in China.
Secondly, the foreign partner must prepare a written document attesting to the fact they do not own any kind of residential home in China. This means that if you both want to buy more than one property in China, whether it is for personal lodging or investment purposes, the foreign partner cannot legally sign any documents or property registration certificates.
Finally, the foreign partner must prove that they are a citizen permitted to reside in China and whose employment and residence will not affect the country’s security. To do this, the foreign partner must get validation from the Ministry of State Security of the People’s Republic of China.
After going through these steps, you are now able to begin your search for your ideal home in China. To ensure the process goes smoothly, it would be useful to hire an agent to help.
Maxxelli has years of experience in the real estate market and is able to provide you with tailored-made advice on how to buy/rent property. Feel free to contact us for any questions!