Buying property can be tricky business

As the real estate market continued to surge, further regulations were introduced in 2012.

The National Development and Reform Commission, China's top economic planner, put an end to medium and long-term loans for foreign nationals buying homes in a bid to cool the market. This policy has since been changed.

Another expat, who has been living in China since 1994 and at one point owned two apartments in Beijing's Chaoyang district, is thinking of selling his remaining home because of rising prices and his plan to move to Paris, France.

"Foreigners are dissuaded from buying because of cheaper rental prices and the strong renminbi. But there is also the prospect of a national property tax that will eventually come," he said, declining to give his name and nationality.

Another sticking point for foreigners is the 70-year land lease law.

"The Property Law provides the right for residences to be extended automatically after the expiration of its 70-year term," Martinez, the lawyer, said. "But it is not clear still whether additional fees are required for such an extension." Since the real estate market has slowed in the past year, the government has started to ease restrictions. The latest move came in March when down payments for second homes and taxation on property sales were cut.

But there is still uncertainly when it comes to the expat market. "It would be advisable (for foreigners) to hold off until the new policy on real estate comes out later this year or next year," Martinez said. "Unless, of course, a property comes up at a very convenient price."

Jiang Xueqing and Wu Yiyao contributed to this story.

contract the writers through emmaglez@chinadaily.com.cn.

Key points for foreign buyers

Who qualifies for buying residential property in Beijing?

Any foreigner who has lived in China for more than a year and does not own an existing property here is allowed to buy residential real estate for their personal use.

What additional paperwork is required by expats in order to buy a home?

You will need a notarized copy of your passport with a Chinese translation. You must also have a certificate of residency from the Exit and Entry Administration of the Public Security Bureau. This involves an employment permit and a Beijing accommodation registration certificate. Plus, you will need approval from the Beijing Foreign Construction Project Office for State Security Examination that the property for purchase is permitted for foreign ownership. This requires a property ownership certificate, identity card of seller and passport of buyer.

How do foreign buyers pay for properties?

According to the State Administration of Foreign Exchange, expats can pay either through an overseas account or a domestic foreign currency account. The bank is responsible for approving and setting the exchange rate. After settlement, the bank will transfer the exchanged capital into the renminbi account of the seller. There is no cap on the amount exchanged, up to the full value of the property as per contract, both for buying or selling. Like Chinese nationals, foreigners can apply for mortgages of up to 70 percent of the total price of the property. Some large banks provide mortgages in foreign currencies. For example, HSBC Holdings Plc offers loans in yuan, US dollars and Hong Kong dollars. Repayment periods depend on individual bank policy.

 

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