Beijing moves to end practice of faking divorce to be able to buy additional home

Authorities in Beijing have introduced rules to stop couples from faking their divorces to be able to buy more homes in China’s capital.

Up until now, the city allowed married couples with a Beijing hukou – China’s household registration – to buy two flats in the city. Those without a Beijing hukou as well as singles could buy only one flat. So some couples were getting divorced on paper to be able to buy another property. The new rules, which came into effect on Thursday, are designed to stop this practice.

Now, anyone with a Beijing hukou who is divorced but owned two properties while they were married cannot buy another home in Beijing for three years, according to a notice issued by the Beijing Municipal Commission of Housing and Urban-rural Development late on Thursday. Those without a Beijing hukou, who owned one home during their marriage, will also be barred from buying another home.

“Beijing’s move follows similar actions taken by governments in Shanghai and Shenzhen, tightening rules to take on divorces faked for property purposes. It suggests that major cities across the country, especially those with high property prices, will see a similar crackdown,” said Yan Yuejin, director of Shanghai-based E-house China Research and Development Institute.

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40 years of opening up and reform: How property became a driving force in the economy

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In January this year, the Shanghai Housing Bureau said divorced homebuyers will no longer be considered first-time buyers, for a period of three years, if they owned a property during their marriage. This means such buyers will need to put up more money up front to buy a home in China’s financial capital. They will not enjoy the higher mortgage allowances reserved for first-time buyers.