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How to Find a Proper House(二)
Housing & Finance
New Rules for Property Sales to Foreigners

New rules to control foreign investment in China's property market have been agreed, following concern that surging foreign speculation in the market is forcing up house prices.

Shanghai-based China Business News reported
on July 17, 2006 that six government bodies including the Ministry of Construction and Ministry
of Commerce have signed an agreement on a rule
to regulate overseas capital in the property
market.

Foreign firms or individuals will have to use their
real names when buying residential houses. And foreigners will not be allowed to buy residential housing that is not for their "own use or own habitation."

"The measure provides a premise for the government to impose a property tax, which is very popular in most developed countries," said Xu Dianqing, professor with the China
Center for Economic Research of Peking University.

"A property tax would demand a register of names, and it would be the best way to restrain speculation on the property market," he said.

The rule also requires foreign businesses or individuals buying Chinese property not for
their own use to set up a China-registered company to handle the purchase.

The measures are believed to make it easier for the government to monitor the flow of overseas capital into the property market.

Foreign-funded property firms investing more than US$10 million will need to hold registered capital equal to no less than 50 percent of the value of the investment, potentially a huge hurdle for many firms.

The measure is aimed at
preventing those who do not have adequate capital from speculating
in the market."Currently, if a foreign-funded property firm does not have adequate money to invest in the property market, it would borrow from Chinese commercial banks, which in
turn transfer the risk to domestic banks," Xu said.

"With the measure setting such high entrance standards, domestic banks are protected
from these potential risks," he said.Xu added that the public should consider the move to
be a restriction on foreign capital entering the property market.

According to the rule, investors with registered capital less than 35 percent of the total
value of a project, or who fail to obtain a land-use certificate, will not be allowed to borrow from domestic or foreign lenders.

The transfer of projects or stakes in foreign-funded property firms and the acquisition of domestic property companies must be approved by the government.

Notice on the Adjustments on the Regulations Concerning Purchasing or Renting Residence and Offices of Resident Foreign Correspondents and Media Organizations in Beijing

Taking into consideration of the need of foreign correspondents and media organizations accredited in Beijing and according to the relevant regulations of the Beijing Municipal government, the
Information Department of the Chinese Ministry of Foreign Affairs has made the following adjustments on the regulations concerning the purchasing or renting of residence and offices of resident foreign correspondents and media organizations in Beijing.

1. Resident foreign correspondents and foreign media organizations may purchase
or rent residence and offices in the 18
districts and counties of Beijing. While dong so, they should abide by "Regulations on City House Leasing of PRC" and "Regulations of the Urban Real Estate Transfer of the Beijing Municipality".

2. Foreign correspondents are requested to follow the current regulations on renting and purchasing of residence and offices for foreigners in China. While dealing with renting or purchasing procedures, both sides (lease-holder and tenant, purchaser and seller) should

get the approval at the Beijing Foreign-related Construction Project Examination Office
(Add: 10#, Dengchao Hutong, Dongcheng District, Beijing. Tel: 65122820 Fax: 65122820 ext. 804), before signing the contract.

3. After renting or purchasing commercial residence or offices, foreign resident
correspondents and media organizations are requested to notify the IPC and go through necessary procedures with the new leasing or purchasing contracts to obtain resident permits at the Division of
Aliens and Exit-Entry Administration of the Beijing
Municipal Public Security Bureau according to "Law of
the People's Republic of China on Entry and Exit of
Aliens" and its detailed rules.

For those with service passports please go to the Beijing Foreign Affairs Office. When you move into the new residence or offices, a registration should be done at the local police station. Any change of residence or office should be notified. The Information Department of the Chinese Ministry of Foreign Affairs hereby would like to remind you that any failure to go through such procedures will be taken as a violation of the regulation.
4. The above notice will take effect from July 1st, 2004.


 

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