Beijing, China outlaws buying a second homeBy Mason White 7:25 AM March 31, 2013
By: Debbie Gross
Single people with enough money to buy a second home and vacation homes will now have to look outside of China’s large city to make their purchases, according to a new order issued by the local Beijing government.
The capital of China, Beijing, banned single person households from purchasing more than one home and increased the minimum down payment rule for all buyers of second homes as the government tries to cool the overheating property market.
The new measures went in force today, the official Chinese press reported. The city also will impose a 20 percent tax on capital gains from the property, it also said. Previous rules allowed each household with a Beijing residence to buy a second home, opening the way for couples to divorce in order to double its investment capacity.
“This will help calm the panic of people on housing prices,” Yi Xianrong, a Beijing-based researcher at the Chinese Academy of Social Sciences, which advises the Council of Ministers, said. “At the same time, restrictions on home purchases do not change the fundamental demand, and it seems that the new measures in Beijing are aimed more at short-term problems rather than long-term healthy development of the property market,” the expert added.
“It will be pretty difficult for the government to enforce the rule in practical terms since people will buy their second and third homes under companies they control or by using their friends and family members to purchase additional homes. If someone has the money then that person will find a way to buy,” Zhong Dhong, 66, a real estate broker in China told YourJewishNews.com.
The home prices in Beijing rose 5.9 percent from a year earlier, last month, the biggest increase in several years, the National Bureau of Statistics of China said. The prices in the country increased by 160 percent over the last 15 years after properties were passed into private hands, according to the government data.
The municipal government of Shanghai, where prices of new homes last month rose 3.4 percent from the previous year, also issued a notice saying that the city will increase down payment requirements and interest rates for mortgages of second homes, while prohibiting banks from lending to third home buyers.