Beijing imposes fresh home purchase restrictions to close the ‘divorce’ loophole
Residents divorced for less than a year no longer qualify as ‘first-time’ buyers
Beijing residents who have been divorced for less than a year will no longer qualify as “first-time” home buyers in the latest move to crack down on couple’s dissolving their marriage as a way to skirt restrictions on second-home purchases.
The stipulation is one of eight new regulations laid out in a document released by China’s central bank and Beijing’s banking and housing authorities on Friday. The new regulations aim to close the remaining loopholes left by the policy tightening announced on March 17, which raised down payment requirements for most homes in the city to 80 per cent from 70 per cent. It also broadened the definition of “second-time buyers” to those who have no homes under their names but still have a mortgage history.
The tighter definition eliminates those who sell their existing home to buy a new home or couples who divorce to qualify for “first-time” status.
Before Friday, if a couple divorced and one didn’t have a home or a mortgage record, that party could qualify as a first time buyer. But after Friday, both cannot qualify as first time buyer.
A similar measure was introduced in Shanghai last year, but the ban only applied to those divorced within six months.