In China, there are now no restrictions on the types of properties that foreigners are allowed to buy in China, and they can buy through an agent or directly from the developer or owner. Although China has opened its real-estate market to foreigners, not every foreigner is entitled to buy a house on the Chinese mainland; only those who have worked or studied in the country for more than one year are eligible. Furthermore, foreigners can only buy one residential property according to their needs, and are not allowed to buy commercial properties under their own names, unless they form a company for the purpose.
Requirements
The foreigner must have worked or studied in China for a minimum of one year before they can buy a residential house. This law does not apply to foreigners of Chinese heritage or Hong Kong, Taiwan and Macau residents, who are automatically eligible.
Next, branches or representative offices of foreign entities in China can only buy non-residential properties in the city where the business is registered. Furthermore, foreigners must not have any other residential properties in China.
The real estate developer must have the Housing Sales to Foreigners Certificate (an approval paper from the local housing authority). Without the paper, it is illegal for them to sell apartments and houses to foreigners, and so they will not be able to give you the property ownership certificate.
Documents Required
1. Valid passport, visa or Residence Permit.
2. Proof that they have worked or studied in China for over a year, such as a valid Residence Permit, or a visa with an exit and entry stamp.
3. A written promise that the foreigner does not possess other housing property in China.
4. Branches or representative offices of foreign entities in China need to present the business approval document and registration certificate created when the office was first set up in China, and – if relevant – a written promise that purchased housing property is necessary for the work being conducted in China.
China Real Estate Buying Procedure
Step 1: Obtain proof of your one year residence in China from the local Municipal Bureau of Public Security.
Step 2: Once you or your agent find a suitable property, the next step is to submit an official offer letter (through the agent if used). The letter sets out the agreed price, payment schedules and other conditions of purchasing the targeted house. A deposit of 1% of the agreed selling price should be paid to the seller.
Step 3: The seller and buyer will then draft and sign the official sale contract and it has to be notarized if the buyer is foreign.
Step 4: This step is unique for foreign buyer. The buyers are supposed to go to your local Foreign Office for you to have the purchase approved by the government.
It is important to note that if a mortgage is needed, the buyer will need to secure a loan by taking your signed and notarized contract as well as any other document that is required by the bank. Depending on the specific rules of the bank, buyer can take their loan either in RMB or in Foreign Currency. They also need to pay the deposit and an initial 30% of the selling price as a down payment to the seller in terms of RMB.
Step 5: Application is made to the government Deed and Title office for transfer of the deed from the seller to the buyer, on payment of the relevant taxes and fees. Before this can be done, the current owner must pay off any mortgage that exists on the property. This process can take several weeks to complete. The ownership certificate is then issued, and the buyer pays the outstanding 70% of the purchase price and takes possession.
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