Everything you need to know about buying property in China
Buying property in China involves specific fees: the 契税 (deed tax), 中介费 (agency fees), the 维修基金 (maintenance fund) and purchase restrictions (限购). Understanding the Chinese system is essential, whether you are a Chinese citizen, a resident or a foreign investor.
Deed Tax (契税): the property transfer tax
The deed tax (qishui) is the main tax on property purchases in China. The rate varies based on the number of properties owned and the floor area. Since 1 December 2024 (Ministry of Finance announcement No. 16 of 2024), a sole home of 140 sqm or less is taxed at 1%, and at 1.5% above 140 sqm. A second home is taxed at 1% up to 140 sqm and 2% above, including in Beijing, Shanghai, Guangzhou and Shenzhen. From the third property, the statutory rate of 3 to 5% set by the province applies. Note that in cities with purchase restrictions (限购), buying a third property is often prohibited. The deed tax is paid when registering the property title.
Agent Commission (中介费): the intermediary fees
The 中介费 (zhongjie fei) is the commission paid to the real estate agent. In China, it typically amounts to 1 to 3% of the purchase price, shared between buyer and seller depending on negotiations. Major agencies like Lianjia (贝壳), Zhongyuan and Centaline charge around 2%. Since the 2023 reforms, some cities have imposed commission caps. Negotiation is possible, especially in a slow market. When buying a new build directly from the developer, there are generally no agency fees.
Maintenance Fund (维修基金): mandatory for new builds
The maintenance fund (weixiu jijin) is a mandatory fund for any new build purchase in China. It finances major repairs to common areas (elevators, roof, plumbing, facades). The rate is typically 2 to 3% of the purchase price, payable as a lump sum before delivery. This fund is managed by the homeowners' committee or the local housing bureau. For resale properties, the fund has already been paid by the previous owner and transfers automatically to the new buyer. It can only be used for repairs approved by 2/3 of co-owners.
Purchase Restrictions (限购): the quota system
The 限购 (xiangou) system imposes restrictions on the number of properties a household can buy in a given city. In Beijing, Shanghai and Shenzhen, local families (with hukou) can buy a maximum of 2 properties, single individuals only 1. Residents without local hukou must demonstrate 5 consecutive years of social contributions or tax payments. Since 2023-2024, many second and third-tier cities have eased or removed restrictions to boost the market. Foreigners who have worked in China for over one year can purchase a single property for personal use.
Housing Provident Fund Loan (公积金贷款): the subsidized mortgage
The Housing Provident Fund loan (gongjijin daikuan) is a subsidized mortgage funded by the Housing Provident Fund (住房公积金). Employees and employers each contribute 5 to 12% of salary to this fund. The provident fund loan rate is highly favorable: 3.1% for loans over 5 years (versus 4.2% for commercial loans). Loan caps vary by city: CNY 1,200,000 in Beijing, CNY 1,200,000 in Shanghai, CNY 900,000 in Shenzhen. Beyond this cap, a combined loan (provident + commercial) is available. This is the most advantageous option for employees contributing to the fund.
The Hukou system and its impact on property
The hukou (户口) is China's household registration system. Your hukou determines your administrative home base and directly affects your ability to buy property. In major cities with purchase restrictions (限购), having a local hukou makes buying easier: fewer conditions, ability to buy a second property. Without local hukou, you typically need to prove several years of social contributions. Hukou also influences access to Housing Provident Fund loans (公积金贷款) and purchase subsidies. Since 2024, China has been gradually easing hukou-related restrictions in mid-tier cities.
Mortgages in China: rates and conditions
Mortgages in China are regulated by the PBOC (People's Bank of China). The minimum down payment is 30% for a first property (20% in some cities since 2024) and 40-70% for a second property depending on the city. The benchmark rate is the LPR (Loan Prime Rate) at 5 years, currently at 3.95%. Banks add a margin (positive or negative) to the LPR. Rates are revised annually or monthly depending on the contract. Maximum term is 30 years and repayment must end before age 65-70 (depending on the bank). Two repayment methods exist: equal installments (等额本息) and equal principal (等额本金).
Property rights: the 70-year land lease
In China, land belongs to the state. Property owners acquire a land use right (土地使用权) for a set period: 70 years for residential housing, 50 years for mixed use, and 40 years for commercial use. What happens at expiry? Under the 2007 Property Rights Law and current practices, the lease is automatically renewed. The 2021 Civil Code confirms automatic renewal for residential properties. Renewal fees have not yet been clearly defined but are expected to remain modest. In practice, no 70-year lease has yet expired (the earliest ones date from the 1990s).