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Purchasing Properties in China as a Foreigner

Have you been living in China for more than six months? Are you tired of paying rent? Have you considered the possibility of purchasing an apartment for you and your family to live in? How much do you understand the Chinese regulations that are imposed to foreigners? Could you be asking yourself if you are allowed to buy a house in China? Well, worry no more as this article will answer all these questions by discussing the procedure, requirements, costs and the risks related to foreigners buying properties in China.

For the past decade, the housing market in China has been booming and as a result, homeownership has recorded an increase of 80 percent hence housing prices have been rising sharply across the country. Most foreigners, who plan to stay in China for long, are thinking of purchasing their own property after seeing how the housing market has been performing so well and the fact that the quality of Chinese residential property is surging. Unfortunately, the process of buying properties in China is tricky and strenuous as the government has imposed so many laws and regulations to foreigners.  Foreigners should be aware of the requirements, process, price and the risks involved in purchasing a Chinese property for them to make a sound investment decision.

Essential requirements

Foreigners who have studied or worked in China for a minimum of one year are permitted to buy property. However, the requirements vary from region to region. For example in Shanghai a foreigner is supposed to produce tax receipts to the local authorities for 12 of the past 24 months and you must be married in order to purchase a house. In Beijing, all you need to do as a foreigner is to pay social security and taxes for at least 5 years before the government allows you to buy a house. Unfortunately, a foreigner can only own one property and it has to be residential. Again, the foreigners are banned from renting the property as you are supposed to use it for dwelling purposes. For you to buy a commercial property, you need to first incorporate a company in China. Fortunately, just like many other regulations in China, you can get around these tight regulations. For example, if you consult a local attorney, you might be able to purchase a second home since China’s government’s curbing regulations are not followed strictly. If you manage to buy a second house, you can use a different Chinese name to register. This is not hard as it can be translated phonetically from your native language because you must have a Chinese name so as to register a property.


After living in China for half a year, you now need to wait for at least a year for you to qualify to purchase property. Six months after residing in China for a year, you have finally qualified to buy a house. The next question that comes to your mind is, how do I go about it? The process of buying a house in China is the same as that of the local residents apart from a few additional requirements that have been put for foreigners.

Below are the steps to be followed:

Step 1:
Obtain proof of your one year residence in China from the local Municipal Bureau of Public Security. As you do that, you can either hire an agent or you can search for your ideal residence by your own.

Step 2:
Once you or your agent find a suitable property, the next step is to submit a preliminary agreement of which you will need to set out the terms and conditions of purchasing the targeted house. A deposit of 1% of the agreed selling price should be paid to the seller. That is if the seller agrees to your proposal.

Step 3:
The seller and you 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. You 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, you 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 your bank, you can take your loan either in RMB or in Foreign Currency. You need to pay the deposit and an initial 30% of the selling price as a down payment to the seller in terms of RMB. Even though most foreigners wire their foreign exchange to their bank accounts in China, one needs to remember that you have a foreign exchange quota of $50,000 every year. You therefore need to let your seller know, that if you don’t have sufficient cash in RMB you will need time to remit and convert your currency.

Step 5 :
This is the last step of becoming the home owner in China and all you need to do is to visit the Deed and Title Transferring Office so they can transfer the title of the house under your name. The ownership Certificate will be issued to you after a few weeks and you will now become an official home owner in China.

Financial aspects

If you have the money and documents ready, the process of buying a house in China can be very smooth. However, you need to contemplate carefully, on where you want to buy the house before you kick off the process of purchasing property in China. This is because many foreigners who come to study in China have the freedom to relocate across China hence it is important you consider house prices in different regions when making your investment decision. Buying a house in premier locations in first-tier cities tend to be the most expensive. Like San Li Tun in Beijing or the Bund in Shanghai. On average, when buying an old house in Beijing the price per square meter will cost you over 41000 yuan. This is according to This means that if you want to buy a two bedroom apartment in Beijing, you will have to pay more than 4 million yuan per square meter, or even have to pay more than $0.65 million. On average, a second hand apartment in Chengdu, which is a booming second tier city, will cost you 8600 yuan per square meter which is one fifth of the price in Beijing. If you want to spend equal amounts, you can decide on either buying a smaller property in an average location in Beijing or a large house in Chengdu’s premier location. In addition to this, there are many taxes to take into account regardless of where you purchase your house. For instance, you are responsible as a buyer for 3%-5% of the selling price for deed tax, transfer fee 0.5%, city maintenance and construction tax 7% and 0.2%-0.4% for legal fees. Still as a foreign buyer you have to pay 0.01%-0.3% of notarization fee. These totals add up to 11.6% of the selling price which is significant enough for you to consider while budgeting your purchase.

Tips and Risks

The process of buying a house in China is neither easy nor cheap hence you need to take extreme and thoroughly caution on the seller and target property before you sign any contracts. You also need to know some few tips about buying properties in China like, the government has complete ownership over the land upon which all the properties are built. This means that when you buy a house, the residential area is leased to you for a 70 year term. Also buying older properties is risky as the government can make a compulsory purchase of your property for the purpose of new construction. If this happens, you may be forced to sell the property and you may also lose money from it. This means, that the newer your property is, the less likely the government will want to purchase it. You need to make sure that the mortgage the seller took out on your target property is paid off before you make the purchase. You can do this by checking the original deeds on the property, in case the seller’s mortgage is not settled, the deeds will state what loans have been taken out under this property. If the seller’s mortgage is in foreign currency, the seller is not allowed to convert your down payment into foreign currency so as to pay off his mortgage.

By now, you must be having a clear picture on how foreigners can buy houses in China. If you are ready to start you house purchasing project, you can start the search for your ideal house now. You now need to be both financially and legally prepared before you sign the purchasing contract for your new house so as to make the journey smooth and enjoyable.