Buying Property in China

The real estate market in China is huge and has tremendous potential for investment. Fuelled by the desire to promote investment in real estate the Chinese government has made attempts to modify laws and permit foreign purchase of property. As a result of this move, the government has had to permit sale of Chinese property by foreign investors. With this relaxation in property laws, you as a foreign investor will have ample choice of residential and commercial properties in China.

"Our flat came with basic furnishing and with the expat community constantly changing, you’ll find that it’s super easy to get second-hand items really cheap at the regular moving sales that people advertise online." - Kirsten Munro, Expat in Chengdu

Investors must, however, beware that only certain properties and areas in China are open for foreign investment. When buying property here, one needs to discuss one's needs with the real estate agent and openly indicate that one would not like to get on the wrong side of the law. Expat investors must ensure that the agent carries through the property purchase within the legal framework.

As an investor, one can be sure that on will benefit from substantial long-term returns that are very likely to accrue to anyone who invests in Chinese property.

The Legal Aspects

If you have never been to China before it is natural that you would be unaware of local laws and customs. It would suffice to say that property laws in the country are certainly far from easy to work with and can prove to be quite daunting to the uninitiated.

Obviously, research on your part will make things easier but do not make the mistake of blindly following what you have come across on the internet. The complex nature of the market is one reason why there is plenty of contradictory information available online, and complete reliance on this could be the biggest pitfall.

Surveys and reports carried out in around 120 districts in China from a property investment point of view have revealed significant differences in the supply of water, electricity and labour. Additionally, overall access to loans and property protection are divergent. When buying property look into these factors as well as taxes and fees applicable.

If you choose to buy through an estate agent who is based outside China, then your realtor will have to deal with the seller on your behalf.

Buying Process

Once the buyer (through his realtor) and the seller have reached an agreement on the price, a Customer Confirmation Agreement must be entered in to. The realtor holds the deposit until the entire buying process is complete and both parties have fulfilled their obligations.

The next step involves a visit to the Realty Transaction Department to begin the authorization of the transaction and the process of transfer of Chinese commercial property. Two forms: (1) Property Purchasing Registration Form and (2) Property Selling Registration Form must be filled out and submitted together with the Property Ownership Certificate. Following the submission of these documents, the department provides the buyer and seller with an issue date for the Realty Transfer Notice to buy property in China.