I imagine everyone has had quite enough of sunny beach posts, so it’s time to get back to what I do best – report on the weird and wonderful world that is life in China!
The government is forever playing a cat and mouse game to try and control the property market in China. Prices have been spiraling upwards as wealthy Chinese buy up property as a way of storing their wealth. It is not uncommon for people to have 20 or so properties. Shanghainese landlords love to boast about how many properties they own as I found out when I was looking for a place to rent.
And it’s these multi-property owners that the government wants to penalise with its measures like the newly introduced sales tax on second properties. Basically, profit on sales of second properties will soon be liable for a 20% tax. This has had an interesting impact on the market as people scramble to dump their properties before the tax takes effect. But a surprising side effect is the rise in divorces. Why? Because couples with say, two properties are getting divorced, so that they can put one property in each of their names, to avoid the sales tax. They can then sell one property as a sole property, before getting remarried. Genius!
This phenomenon happened a few years earlier too, when the government introduced a rule that meant you needed to pay a higher down payment on additional property purchases. So while you might pay a 30% deposit for a first property, 50% would be required on a second property and 100% on a third property purchase. So some couples were getting divorced so that they could buy a second property but only pay 30% down payment instead of having to pay a 50% deposit on a joint second property.
Who says romance is dead!