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How to buy a house as an expat in China

As an expat in China housing is one of your main concerns. Most foreigners rent apartments, but if you plan to stay here for the long term it might behoove you to buy a home. Unfortunately, the process requires lengthy preparations. This article will answer all your question on the requirements, procedure, costs and risks.

Requirements and Restrictions

It might not seem that way sometimes but the government stipulates that foreigners are allowed to own property in China — provided they use it for dwelling purposes only. But in order to purchase commercial or industrial property, you have to incorporate a company.

And while there are no nationwide restrictions on the number of properties eligible foreigners can buy, local purchase restrictions and requirements may apply. In Shanghai, people without a city household permit are allowed to buy only one property. Make sure to check the requirements of your local government.

Fortunately, there are always ways to circumvent restrictions. To register a property, you have to use a Chinese name, which can be translated phonetically from your native language. Therefore, if you manage to buy a second house in a different place than your first, you can just use a different Chinese name to register.

The Process

Let's say you have lived in China for half a year, but your local government requires a one-year residency period. You'll need to wait for at least another half year to qualify to buy a house. The process for this is very similar to that of Chinese buyers, plus a few additional steps:

Step 1: You need to provide proof that you are eligible to buy a property. If a one-year residency period in China is required, you should go to the local Municipal Bureau of Public Security to obtain proof of your one-year residency. If the local government restricts the number properties you can buy, you need to obtain a written declaration to prove you have not reached this limit. Meanwhile, you can begin searching for your ideal residence, or hire an agent for this.

Step 2: After you find a suitable property, you will need to submit a preliminary agreement in which you set out the terms and conditions of the purchase. If the seller agrees with your proposal, a deposit of 1% of the agreed selling price should be paid to the seller.

Step 3: You and the seller draft and sign the 'Official Sale Contract,' which has to be notarized if the buyer is foreign.

Step 4: Go to your local Foreign Office to have the purchase approved by the government.

Step 5: Your last step towards becoming a homeowner in China is to make a trip to the Deed and Title Transferring Office to transfer the title of the house to your name. After a few weeks, the Ownership Certificate will be issued to you, and you will now become an official homeowner in China.

You have now bought your property. You can now customize and decorate your new home. Typically, new homes are unfinished upon completion: only essentials are provided. It will now be your duty to complete the interior design.


The process of buying a house in China is neither easy nor cheap. We suggest you take extreme caution and thoroughly examine the seller and the property before signing any contracts. Here are some things to keep a mind.

The government has complete ownership over the land on which properties are built. When you buy a house the residential area is leased to you for 70 years. In addition, buying older properties can be risky because the government can buy it from under without warning and turn it into new condominiums. You will be forced to sell your property, and might even lose money from it. The newer the property, the less likely the government will want to purchase it.

Make sure the mortgage that the seller took out on your target property is paid off before you make the purchase. You can check the original deeds on the property. If the seller's mortgage is not paid off, the deeds will state what loans have been taken out under this property. You can also pay attention to this in the sales contract and add a clause saying the property needs to be transferred unencumbered by any rights. In case the seller's mortgage is in foreign currency, the seller is not allowed to convert your down payment into foreign currency and use that money to pay off his mortgage.

With this information in mind, you probably have a clearer picture of how foreigners can buy houses in China. You are now finally ready to kick off your house-purchasing project and start searching for your ideal residence. The journey will be exciting but also challenging, so please don't forget to do your homework ahead of time so you can be legally and financially prepared. If you have any questions feel free to contact Maxxelli.

Source: shanghaiexpat


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