Singles banned from buying second homes in Beijing

02 Apr 2013

Single-person households in Beijing have been banned by the government from buying more than one residence. Also the minimum down-payment for all buyers of second homes has been increased as the government moves to rein in the property market.

The new move is set to come into effect today, according to a report by the official Xinhua News Agency released yesterday. The Chinese capital will also enforce a 20-per cent tax on capital gains from property, the report added.  Under current rules each household with a Beijing residence permit is allowed to buy a second home, opening the way for couples to divorce on paper to double their ability to invest.

According to Yi Xianrong, a Beijing-based researcher at the Chinese Academy of Social Sciences, an advisory body to the Chinese cabinet, this would help to calm people's panic about home prices.

He added, at the same time, restrictions on home purchases did not change the fundamental demand, and it seemed the new measures in Beijing were aimed more at short-term problems rather than long-term healthy development of the property market.

China's National Bureau of Statistics said 18 March  that prices in the capital shot 5.9 per cent from a year earlier in February, the biggest increase since February 2011. Prices across the country increased 160 per cent in 1998-2011 following ownership going into private hands, according to government data.

The city government of Shanghai, where new home prices in February increased 3.4 per cent from a year earlier, also issued a notice saying the city would raise down-payment requirements and interest rates for second-home mortgages.

At the same time banks would be prohibited from providing credit to third-home buyers.