Beijing Enforces Limits on Foreigner Property Purchase
The Chinese government has reformed its property purchase system by limiting the number of properties a foreigner can buy to one, as part of their attempts to cool a potential housing boom in the country.
A warning was issued by the government in July last year that restrictions would be enforced to limit a rise in house prices and maintain a sufficient amount of low-income housing in the country. Leaders are concerned that an investment boom could prompt a sharp rise in inflation, and also that excessive investment in real estate, supported by accessible lending, could lead to a debt crisis as developers of unprofitable projects fail to make repayments.
Chinese families were first permitted to buy their homes by the communist government in the 1990s. Property buyers are issued seventy year deeds for the properties, as the government officially owns all land in the country. The largest proportion of mainland China’s foreign population live in Beijing, many of whom are Western and Asian businesspeople and diplomats, among others.
Foreign property owners in Beijing are not permitted to rent out their property, and will need to prove that they have lived for at least a year in the country, either working or studying. These new regulations also cover those from Hong Kong and Macau in their definition of a foreign buyer; although these areas are Chinese territory they are considered by regulators to be foreign economies. The reforms have also banned some projects altogether, such as luxury villas, in a move intended to increase the amount of affordable housing available.
Figures from the Chinese government show that investment from developers on real estate projects, including office buildings as well as residential properties, rose by 21.8% last year. Due to these recent reforms, developers will now be liable for a 60% VAT on new projects.
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A warning was issued by the government in July last year that restrictions would be enforced to limit a rise in house prices and maintain a sufficient amount of low-income housing in the country. Leaders are concerned that an investment boom could prompt a sharp rise in inflation, and also that excessive investment in real estate, supported by accessible lending, could lead to a debt crisis as developers of unprofitable projects fail to make repayments.
Chinese families were first permitted to buy their homes by the communist government in the 1990s. Property buyers are issued seventy year deeds for the properties, as the government officially owns all land in the country. The largest proportion of mainland China’s foreign population live in Beijing, many of whom are Western and Asian businesspeople and diplomats, among others.
Foreign property owners in Beijing are not permitted to rent out their property, and will need to prove that they have lived for at least a year in the country, either working or studying. These new regulations also cover those from Hong Kong and Macau in their definition of a foreign buyer; although these areas are Chinese territory they are considered by regulators to be foreign economies. The reforms have also banned some projects altogether, such as luxury villas, in a move intended to increase the amount of affordable housing available.
Figures from the Chinese government show that investment from developers on real estate projects, including office buildings as well as residential properties, rose by 21.8% last year. Due to these recent reforms, developers will now be liable for a 60% VAT on new projects.
If you wish to see the original article please click here
posted by Obelisk International at 5:12 pm
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