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Fear over new property tax drives Chinese to divorce

Chinese homeowners are taking extreme measures to avoid a new property tax, including queuing up for divorce.

Fear over new property tax drives Chinese to divorce

People crowd into the Nanjing Municipal Real Estate Trading Centre looking to sell property. Photo: CFP

This is the second wave of divorce seeking by Chinese couples, which was first sparked off several months back after banks refused to lend to families trying to buy a second home. Divorced couples then made separate applications for loans as individuals.

There were similar scenes in Wuhan, Nanjing and Ningbo.

"It is strange, but policy forces people to do it," said Li Li, managing director of International Strategic Group, a real estate consultancy in Shanghai.

One unnamed official at the Yangpu District registration office told the Shanghai Daily newspaper that he was advising couples to come back to be remarried after they had finalised their paperwork.

The frenzied search for a loophole underscores how much of the Chinese economy is tied up in property, with house prices having risen dramatically over the last five years.

The prospect of the new tax also drove a spike in sales, as sellers rushed to complete their deals before the rules come into effect.

In Beijing, estate agents said sales were up around 20 percent.

In 2010 and 2011, couples resorted to forging divorce certificates so they could skirt restrictions and buy more property.

"I know people who have divorced to evade taxes," said one man who asked not to be named as he waited outside a real estate trade centre in Pudong on Wednesday. "But I think marriage is more important than property."

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