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| Chinese
Property - Buy |
How to Buy
a House in China (November 2008) |
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Introduction:
This page contains specific information for
Expats wishing buy property in China
Topics on this page include:
Buying a Home
Buying a Business Property
Buying a House
Foreigners can buy a house in China, but there are things
you need to be aware of:
Entitlement
First of all it is true that you normally have to work
or study for at least one year before being permitted
to buy a place of your own - or be a permanent resident
( which is very difficult), or be married to a Chinese
National ( which many people forget to mention)
Land Ownership
Second, you do need to know that you are only buying
the building. You are not buying the land it sits on.
In China, all land belongs to 'The People'
You may need to adjust your perception here to understand
properly, as this point is very easy for foreigners
to misunderstand. This does not mean it belongs to the
Central Committee in Beijing, although at times it may
appear as such. What is does actually mean is that any
land that is not part of a leasehold agreement, can
be used by anybody. This goes straight back to the Chinese
preoccupation about having enough food to eat. Therefore,
any land not under contract can be used by anybody to
grow food - and you will see this on roadsides as you
pass by. I hope this is now clear?
There are other aspect of this as well regarding: peasant
communities and farming, National Industries, Government
controlled areas, etc; but these are of no concern to
us here...
Buying an apartment is therefore not a problem, but
if buying a Western style house in a 'Garden', then
this is a big consideration. However, perception is
a wonderful thing; so consider this to be like buying
a Western property that has a 'Ground Rent', meaning
the ground is rented to you, but the building is yours.
Some flats in UK use this method, so check it out in
the West to understand the concept properly.
Ground Rent
Having understood that you only own the right to use
a property for a certain number of year's, you will
find it is normally one of the following:
35 year's
40 year's
50 year's
70 year's
and then the land will automatically return back to
the government. To this day the law is still the same,
which means that you can not give anything to your kid's.
But then again, just as in the West, this can be renewed
nearer the time
Land Ownership
Now you may want to know who decides on the length of
ownership of the land = very simple; the details are
always done between the local authority and in most
cases (99%) the property developer, and it is done behind
close doors...
Basically it is all about how much money goes on the
table, and then the government decide how long they
will give "owner ship of the right to use the land"
for. Simple, and none of your business!
Mortgages
Mortgages are simply Bank loans in China. You can theoretically
get one, given you meet the lending criteria, but as
a foreigner it is very difficult for you to get approval
Given that housing prices in China are currently about
one decimal place lower in major Eastern cities than
in UK for an equivalent property, and far less elsewhere,
I wonder why you would even consider this option? Best
to buy outright, and use having 'Cash' to obtain a very
big discount. Your mortgage loan will be very expensive
in China, if you can even get one?
Our advice, given the Ground returns to the People,
is that as a 30-year commitment a mortgage does not
make any sense. Better you look at renting instead
Actual Properties
Finally we get to the properties themselves. Your options
should be quite simple, as most foreigners live in major
cities. You will have about 3 choices normally:
1. Buy a new or used apartment in a
city centre or major district
2. Buy a new apartment in a 'Garden'
3. Buy a House or Villa with Pool in
a Garden
Virtually regardless of which option you choose above,
the premise is virtually the same - your accommodation
will normally be fully fitted (Modern Kitchens and chandeliers
etc), and partially furnished. Other options can be
discussed at time of purchase, and may form a part of
your bargaining - especially if you are paying 'Cash'
You will need help with this, and we can offer a Trusted
Chinese Independent Lawyer to assist you - please
ask for personal service via our contact
page
Final Note:
The Chinese property market is currently suffering it's
very first ever slide, and prices of new and used properties
are plummeting to ridiculously cheap prices. Much of
this is due to over-reaction and panic selling - so
there are some extremely good bargains to be had. Take
your time, as we all know these things take months and
years to resolve, especially in the current Global financial
crisis. Overall, China Expats does recommend you buy
a house in China, but midway through 2009 is about the
best time generally we think - but who knows for sure?
Buying Business Premises
You can do this if all you are Sole Trader or Small
Business buying is a local garage, local lock-up type
premises, or a small factory in the wrong place - and
the rules are similar to above; but you do need to know
how to do this locally, and maybe we can help you in
Guangdong Province?
Otherwise forget it. This then becomes a proper, fully
regulated, international business venture - and you
will need to have a Chinese Company, WOFE, Hong Kong
Head Office or similar to even get admittance to the
stadium, never mind a place on the playing field! We
can help you with this also, but it is a very different
ball-game
Conversely, for foreign investors who are offering relatively
large sums of money, it can be quite easy. By choosing
the right area of an economic development zone you can
also gain some very good incentives, such as: Local
grants and Development loans for rural Greenfield and
city Brownfield sites, tax incentives, and other serious
financial benefits. These usually come with a cheaper
payroll and cost of living also
If you need assistance in Guangdong then please contact
us for assistance - we live here and know the score
Related Pages: Renting
Property |
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| This
information is as supplied by the Chinese Embassy in
UK, as dated 20th June 2008, and/or other reliable sources.
Please check this information yourself as it may alter
without notice, and whilst we try our best to ensure
it is correct, please do not hold us responsible for
any errors - this is intended as a simple guide only |
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