For centuries China stood as a leading civilization, outpacing the rest of the world in the arts and sciences, but in the 19th and early 20th centuries, the country was beset by civil unrest, major famines, military defeats, and foreign occupation. After World War II, the Communists under MAO Zedong established an autocratic socialist system that, while ensuring China's sovereignty, imposed strict controls over everyday life and cost the lives of tens of millions of people. After 1978, his successor DENG Xiaoping and other leaders focused on market-oriented economic development and by 2000 output had quadrupled. For much of the population, living standards have improved dramatically and the room for personal choice has expanded, yet political controls remain tight.

Property Prices

Range Varies, for example:
From around £66,000+ for a 1 bed flat in the city
From around £126,000+ for a house
From around £200,000+ for a new apartment
From around £140,000+ for an old apartment

Where to buy

The popular places to buy property in China are the capital Beijing and Shanghai.

Cost of Living

The cost of living in China is cheap in western China but more expensive in Eastern China. Food is relatively cheap throughout the whole of China.

Buying real estate

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.

It is important to be aware if buying an older property that developers or the government are entitled under Chinese law to make a compulsory purchase of the property if the land is needed for new construction work. The price they pay may be less than the price you paid for the property. New houses and apartments are not usually at risk. It is advisable to buy older properties only on a freehold basis, which requires higher buyout payments and is therefore less attractive to the government or developers. The other categories of property ownership in China are Use Rights and Owning Use Rights, each of which require lower buyout payments. No one in China has full ownership of a residential property and the land on which it is built. Residential land is usually leased for 70 years.

Although prices vary widely, the following have been quoted as being average for various types of property in Shanghai:

TYPE SIZES Average Total Price
Old Apartments 70 - 220sqm 1.2mil -5.5mil
Lane Houses 150 -250smq 3mil - 7mil
Garden Homes 250-500sqm 15mil -50mil
Newly-built luxury Apartments 80 - 250sqm Not available

The usual procedure for buying property in China is as follows:

 Landlord lists property with space

A seller will list their property with an agency by signing a basic agreement authorizing our agents the right to list and sell their property.

 Deposit and offer letter

If a buyer is interested in buying a property they have been shown through the agency then the next step is to sign an official offer letter and place a deposit. The offer letter will outline expected price, payment schedules and any other conditions. 1% of the total offer price as a deposit should also be placed.

 Start to arrange financing

The banks will not be able to process any type of bank loan until an official sales contract has been produced but it is very important to begin researching and making financial arrangements before the sales contract is signed.

 Property, landlord and security check

A check on the property and the landlord should always be made by the agency and provided to the client. In the event the property is on the government's historical protection list, or in the advent that the property falls within one of the more sensitive areas of the city the buyer may have to apply for government approval and with the public security bureau for the sale. Space will handle this procedure.

 Sales Contract

Both the seller and the buyer enter into an "official sales contract" after all the issues have been agreed on. All foreigners must have their contract Notarized by the City of Shanghai Notary Office.

 Property Exchange Centre /Pay taxes and fees

Ownership transaction must be registered at the Shanghai Property Exchange (the government deed and title office). The buyer and seller will hand in the title at the Centre to have the name transferred from the sellers name to the buyer's name.

At the same time the buyer and seller will be required to pay all related taxes and fees at the exchange centre.
This process takes between 2-3weeks to process.

 Title and property handover

An ownership certificate (deed to the property) is issued to the buyer. The name on all the utilities will be changed.

When purchasing new property individual checks and planning bureaus don't need to be done.

Bear in mind that freehold property is the owners own property and banks will loan money out to purchase the property. Where as with a Use rights property banks will not loan money out as it is still the governments property not the owners. It is therefore recommended to only buy new developments and old ones which are freehold.

Legal

A reputable agent and agency should be appointed and a lawyer should be appointed for all the paperwork.

Fees payable

There are various fees payable which include agent fees, lawyer fees, checks on the landlord and seller to be done by the agency and ownership certificate.

Taxes

Capital Gains tax is 20%; tax on income can be anything between 5% - 45%. Overseas accounts are taxed by China as well. Real estate tax is 1.2%.

Finance

You can get a mortgage through a foreign bank to provide you with the loan to purchase your property.

Embassy
Chinese Embassy
49-51 Portland Place
London
W1B 1JL
General Line: 020-72994049