Sham marriages and divorces are common in China to beat limits on home and vehicle ownership – no wonder Shanghai has cracked down
- Couples go through fake divorces so one party can take advantage of first-time-buyer privileges to acquire an extra property, then remarry
- The practice stokes the rise in property prices by creating extra demand, but runs counter to President Xi Jinping’s dictum that homes are not for speculation
As the Chinese saying goes: for every measure from above, there will always be a countermeasure from below.
That may explain why, for many years, despite local governments’ bests effort to cool off the overheating property market in major Chinese cities, resourceful residents have always found a way to beat the system.
One example is the administrative orders limiting the number of homes one family can own, which varying from city to city. In Shanghai, for instance, a person with a hukou, or permanent residency, can buy two properties at most, and those without can only buy one.
But no matter what the quota is, there has been one glaring loophole: to become eligible for a first-time homebuyer scheme, many couples divorce, which allows the spouse without any property to snap up a new one, before remarrying.
Now the authorities are striking back.