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“The legal system in China governing the sale of property to foreign individuals and corporations is a hotchpotch of laws which come from both central government and local authorities,” says Adam Samuel from Nubricks, a foreign property blog. “In 2002, China eliminated the different treatments between local and non-local purchasers of real estate; it was among one of the few countries which imposed no limits on investments in real estate - but that has now changed.
“Today, as matters stand, although the law could change tomorrow, recent changes mean property ownership for investment by foreign companies and non-resident individuals is prohibited – although it is possible to set up a company registered in China that is able to own property. The new law permits only non-citizens who have worked or studied in China for at least a year and hold an active resident visa to buy a property.
“Furthermore, there is no private ownership of land in China, so you are essentially obtaining the rights to use land. For residential purposes this is usually via a land lease of up to 70 years and non-citizens are not entitled to be landlords. There are two kinds of property titles: use rights – lease rights to the property; free hold – has ownership rights to the property.
“A prospective buyer must make a 30% down payment before applying for a mortgage. Foreign currency mortgages are available and lock in an exchange rate but the amount is limited, making it harder to finance expensive properties. Fixed rate mortgages currently stand at around 5-6%. Purchase costs amount to 4-5% of the property price and cover maintenance fees, contract taxes, and annual property tax.”
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