WUNRN
CHINA - BEIJING'S ESCALATING DIVORCE
RATE LINKED TO NEW PROPERTY HOUSING TAX
Editor:Sun Xi - November 5, 2013
Beijing's
divorce rate has increased by more than 40 percent in the first three quarters
of this year compared to the same period last year. Experts say that this might
be because couples are seeking to avoid a property tax imposed earlier this
year.
|
|
|
|
The
2013 Social Services Statistics Quarterly Report (Third Quarter) released by
the Beijing Municipal Bureau of Civil Affairs shows that there were 39,075
cases of divorce registration in the first three quarters of the year,
exceeding the number of divorces recorded for the entire 2012.
Official figures show that the number of divorces in the city over the past
four years has increased steadily. In 2009, about 30,000 couples got divorced
and 32,595 couples the following year. In 2011, 32,999 marriages ended in the
divorce court.
Executive Vice President of Beijing Marriage and Family Construction
Association Li Ziwei believes that the unusual rapid growth in divorce has
something to do with the 'Five Regulations of the Domestic Real Estate Market'
published in February to cool down the country's over-heated property market.
According to the 'Five Regulations', people who sell an owner-occupied home
that is not the only home they own and which they have owned for a minimum of
five years, will have to pay 20 percent of their individual income tax when
selling it.
Previously, only a one percent individual income tax was levied on the sale
price. The tax hike increased the cost of existing secondhand home transactions
and affected speculative purchases in the property market.
However, the regulations allow couples with two properties who divorce and put
one house in a former spouse's name to sell their residential property tax-free
under certain conditions. They are then able to remarry.
Mao and his wife, who live in Beijing, have two homes and they wanted to sell
one which was worth 1.7 million yuan ($280,000). To avoid the tax of nearly
300,000 yuan (US$ 49,200), he and his wife registered a house under each of
their names and then filed for divorce. "We can save 300,000 yuan in this
way. It is not a small amount for us. I have to work many years to earn 300,000
yuan," Mao said.
Li said the divorce rate clearly soared in the month after the regulation was
released in March, adding that this phenomenon also occurred in other
first-tier cities, where property prices have sky-rocketed in recent years.
According to Li, the Civil Affairs Bureau in Shanghai's Minxing District deals
with about 30 cases of divorce every day, a sharp increase from its former 10
cases a day.
Jiang Yongping, an expert from the Women's Studies Institute of China, said
some fake divorces could lead to real problems. She warned that couples should
not fake a divorce to make use of the loophole as that could bring about many
unexpected consequences.
"Some husbands may use this as an excuse to get a divorce and marry
another woman," Jiang said.