The recent craze for divorces designed to enable more property purchases may already be on its way out in China’s capital as Beijing banned one person households from buying a second home.
A government announcement on March 1st that homeowners who sell their homes will be levied an income tax as high as 20 percent of the profit they make on the transaction. The new rule’s stipulation that families who own two houses and want to sell one of them would have to pay the higher capital gains tax had led to a surge in divorces as investors attempted to maneuver around the regulations.
And now the city of Beijing is launching counter measures against those clever divorcees by forbidding single people from purchasing a second home. The new rules also increased the minimum down-payment for all buyers of second homes as the government attempts to tamp down real estate demand.
In Shanghai, an identical capital gains tax was announced this weekend with immediate effect. The announcement in Shanghai also contained pledges from officials to implement other existing measures more thoroughly.
According to a report from Xinhua News Agency the new Beijing measures have effect from March 31st.
In a statement released about the new restrictions Hu Jinhui, vice president of Bacic & 5i5j, the second-largest residential real estate broker in Beijing, said, “Home prices will firstly stop rising before a possible moderation in the second half.”
According to the National Bureau of Statistics, home prices in Beijing rose 5.9 percent in February compared to the same period in 2012, which was a significantly higher rate of increase than had been seen in the last two years.
There have been no reports to date of other major cities adopting measures similar to Beijing’s, however, the March 1st regulations specified that local governments will be held accountable for curbing soaring home prices, and asked them to develop rules to ensure this. So divorces may start dropping in Shanghai and Guangzhou soon too.