Registration of assignment, transfer, lease, mortgage and termination of right to use land is handled by local land administrative departments and housing administrative departments in accordance with land and pertinent regulations of State Council. Registration documents are available for public reference.
China Real Estate Association
N° 8 Cui Wei Nan Li
Wan shou road
Beijing, China
Phone : +8610 68286524
Fax : +8610 68281299
e-mail : kfc@21cn.net
Web : www.ccdpc.org.cn
Any individual or entity that obtains income from assignment of right to use state owned land, buildings and facilities must pay land value-added tax. Foreign and foreign-funded enterprises engaged in the above mentioned activities are also subject to land value-added tax. In case of tax payers failure to pay taxes, land and housing administration will reject title transfer application of taxpayer.
A progressive tax rate is employed. If taxable sum value of a real estate transaction does not exceed 50% of sum of deductible items, tax rate is 30%; where it is in excess of 50% but does not exceed 100% of sum of deductible items, tax rate is 40%; where it is in excess of 100% but does not exceed 200% of sum of deductible items, tax rate is 50%. For sum of value addition in excess of 200% of sum of deductible items, tax rate is 60%.
Ownership of property in China is divided into three types: (1) Socialist ownership by whole people, equivalent to ownership by state; (2) collective ownership, which is ownership by collective organization; and (3) private ownership by individuals or private entities.
Property may be owned by two or more citizens or legal persons. Joint owners have preemptive rights on the same terms and conditions offered third parties. State owned land may be used by collective units and state units.
Real estate sales in China take place in the form of transfer of right to use land. The length of time over which property rights are assigned are limited, and depend on the purposes of land utilization. Land user shall go through registration to obtain certificate for land use. Contract for assigning right to use land shall be signed by and between land administration departments at the municipal and county levels.
Chinese marriage law provides that husband and wife have a right to inherit each other’s property, and that parents and children have a right to inherit each others property. There are two means of inheritance by law in China, intestate succession and by will.
Registration of assignment, transfer, lease, mortgage and termination of right to use land is handled by local land administrative departments and housing administrative departments in accordance with land and pertinent regulations of State Council. Registration documents are available for public reference.
In general, contracts must be made in written form. Documents regarding amendments to contracts agreed upon by all parties shall be indispensable parts of contracts. Contracts according to Chinese law are formed when principal clauses are agreed unanimously through consultation by parties according to law. Principal clauses refer to the following: a) subject matter (goods, property etc.), b) quality and quantity, c) time limit, method and place of performance, and d) liabilities for breach of contract. Invalid contracts refer to contracts made through fraud or duress, in violation of any laws and administrative decree of state, contract executed by agents in excess of their authority, or contract which violates interest of State or public.
When a contract is breached through fault of one party, that party is liable for breach of the contract. If both parties are at fault, each party must assume corresponding liabilities according to actual circumstances.
Property Taxes:
Any individual or entity that obtains income from assignment of right to use state owned land, buildings and facilities must pay land value-added tax. Foreign and foreign-funded enterprises engaged in the above mentioned activities are also subject to land value-added tax. In case of tax payers failure to pay taxes, land and housing administration will reject title transfer application of taxpayer. A progressive tax rate is employed. If taxable sum value of real estate transaction does not exceed 50% of sum of deductible items, tax rate is 30%; where it is in excess of 50% but does not exceed 100% of sum of deductible items, tax rate is 40%; where it is in excess of 100% but does not exceed 200% of sum of deductible items, tax rate is 50%. For sum of value addition in excess of 200% of sum of deductible items, tax rate is 60%.
Land Use & Control:
According to Chinese Land Administration Law, users of land who have obtained right to use of land shall, in theira ctivities to manage, develop and utilize land abide by laws and regulations of the state and may not jeopardize the interests of society and the public. The land administrative departments under people’s government or at the county level have the authority to conduct supervision and inspection of land use.
Shenzen and Guangzhou have enacted legislation to provide procedures for mortgages on real property. GuangzhouLaw provides regulations for handling mortgages and requires domestic mortgage lender to be licensed by a central bank. Mortgaged and mortgage agreements must be notarized and registered with the city land bureau.
Administaror