Can foreigners buy real estate in China?

Real Estate: Buying a House in China

Homeownership is very important in China as there is currently no adequate social security system and few conservative investment opportunities. Buying ** real estate in China ** is therefore the best way for many people to invest money relatively safely in real estate and to speculate on future real estate profits due to the booming housing market. Houses and Apartments in China --------------------------------------- The housing market exists in Chinese cities predominantly from condominiums in apartment complexes, the so-called "Xiaoqu" (Chinese 小区 pronounced "schiau-chü"). A Xiaoqu usually consists of one or several dozen high-rise buildings between six and 30 floors, and often takes up an entire block of streets. The six-story houses usually have slightly cheaper apartments because they don't have a lift. In China, elevators only have to be installed from a height of seven floors. However, seven-story houses are often built in the hope that the building supervisors will overlook the missing elevator. The [rural China] (/ culture-china / laendliches-china-doerfer.html) differs significantly from the cities in many ways. The apartments to be found there and the apartment prices in rural China are also significantly different. In the country you will find houses and less often apartment settlements, depending on the region with a lot of new building fabric or many older houses made of different building materials. Regionally, the [chinese provinces] (/ china-provinces / chinese-provinces-in-comparison.html) start here, depending on the degree of economic development. Extensive slum settlements and corrugated iron huts like in Latin America or Africa are practically non-existent in China. The Chinese government has numerous social housing and rural housing aid programs. There is a general expectation that every family should be able to buy an apartment. Buying apartments in China --------------------------------------- However, it is becoming more and more difficult to meet these expectations. With increasing personal wealth, more and more Chinese are investing in home ownership, which further reduces the already limited supply of new living space. And so, despite the immense construction boom, there is still too little supply of new apartments in China. It was not until the beginning of 2011 that the Chinese central government tried again to restrict the demand for apartments in Chinese cities through new laws. Chinese banks are no longer allowed to give loans to families who already own two apartments. Owners of a condominium who want to buy a second apartment now have to raise 60 percent of the capital themselves and can only finance 40 percent through loans. When buying a condominium for the first time in China, you now have to finance 30 percent of the purchase price yourself. As a rule, this amount is raised by the parents or other relatives when a newlywed couple wants to buy their own apartment. Chinese Real Estate Tax --------------------------------------- At the same time, the authorities of [Shanghai] (/ cities-china / shanghai /) and [Chongqing] (/ cities-china / chongqing /), the two largest booming cities in China, introduced a new property tax to address the problem of the many speculators bought and to counteract vacant apartments. In Chongqing, an annual property tax of 0.5 percent of the purchase price of the property has to be paid. The housing tax is calculated per square meter and only applies to housing over 100 square meters, so that the majority of apartment owners will not be affected by the tax. However, the government hopes this will ruin the business of speculators, who often own numerous apartments. All these new regulations of the real estate market were published with a lead time of only 24 hours in order to prevent short-term violent reactions from the housing market. At the same time, the prescribed amount of social housing that has to be offered per built condominium has also been increased. A construction investor who is developing a new residential area in China has to sell some of the apartments on offer at a low purchase price to socially disadvantaged families, which are usually determined by lottery. Can foreigners buy real estate in China? --------------------------------------- It is also possible for foreigners to own home in China acquire. Quite a few "guest workers" (or English expats) from Europe and North America are investing in their own apartment in Shanghai, [Guangdong] (/ staedte-china / guangzhou-kanton /) or Chongqing in order to participate in the real estate boom in China. Buying real estate in China is usually handled through housing agencies. The American company Century 21 is very widespread in China, along with a large number of Chinese suppliers. For a foreign buyer, however, it is advisable to also seek advice from a local Chinese lawyer who speaks English or even German sufficiently well. This can prevent possible misunderstandings when drawing up the purchase contract for the property. In China, contracts are usually drawn up in great detail and, if in doubt, you should insist on putting all the details in writing. Although the contrary is often claimed, contracts and sales contracts in China are definitely enforceable and enforceable in court (although not in all cases, because relationships still have a not inconsiderable influence in court). However, real estate (and therefore residential property) in China only exists for a period of around 70 years. After this time, the property reverts to the local government.