Buying Property in China

 Buying Property in China , a guide aimed at overseas buyers considering buying Chinese real estate

Since the Chinese government opened up the purchase of property in the 1990s, buying real estate here has become quite popular and a solid investment for international purchasers. With so much business taking place in this giant country, the ability for foreigners to have a place to stay and live is a necessity and makes foreign ownership practical and reasonable. Foreigners who have worked or studied in China for at least a year are allowed to purchase property. The laws in China, however, are neither simple nor transparent. For this reason it is absolutely imperative to understand the process.

Recent changes to the ownership laws make it a little bit more difficult for both foreigners and local citizens to own and sell property in China, but not much more so than before. Also, laws are different throughout the country, so it is a good idea to obtain a real estate agent and/or lawyer for the area in which you are interested in purchasing. They will know the local laws and officials and be able to guide you through the process.

Virtually all of the purchases in Chinese real estate are off plan or recently constructed developments, and it is often said that the newer the better. However, with so much development in this large and growing country, it is still a good idea to perform as much due diligence into a developer as possible. An IDIP, or International Developer Information Pack, is a great resource that can help the buyer make an informed decision.

Although the process is different in the various major cities, here are the basics of buying in China.

Find a property and submit and official offer letter through your agent. This will spell out the price, payment schedules and other conditions. When accepted, a deposit of 1% is due.

Make any financing arrangements. Chinese banks have limits as to how much they will lend and what percentage needs to be paid upfront, so do your research on this ahead of time to know what exactly you can afford.

Foreigners must apply to the government for permission to buy property. This is granted through the public security bureau. Also, you must have a notarized Chinese name in order to purchase. This can be done at your local embassy or in China at a notary’s office.

Once the government has granted the buyer permission to buy, the seller and buyer enter into the official sales contract, called the Customer Confirmation Agreement. This should be reviewed by your agent and lawyer before signing. At this signing, a deposit, typically, of 30%, is due. Should the sale fall through, this is returned to the buyer.

The official transfer process must go through the Realty Transaction Department. This process can take a month or more. They need a Property Purchasing Registration Form and a Property Selling Registration Form completed and filed with the Property Ownership Certificate. The Realty Transaction Department will provide a date for the official Realty Transfer Notice to be given.

At the appointed date, the final transaction takes place. Money is exchanged, any legal fees paid, transfer and property taxes are due and the final transfer documents are signed. The keys are handed over and you now have your new Chinese property!

Again, the process is a bit different in each major city, and the taxes vary by locale, but it follows the same basic path.

Useful Chinese Resources

CNTO - China National Tourist Office

China - Wikipedia, the free encyclopedia

China General Information, China Information