Chinese couples divorce to avoid property tax

Chinese couples are flocking to divorce to evade a new tax on home sales after the government cracked down on property speculation, the newspaper reported on Wednesday.

China’s central government last Friday issued rules to rein in house prices, including a nationwide capital gains tax of 20 per cent on profits owners make from selling residential property.

But a loophole allows couples with two properties who divorce and put each house into one person’s name to then sell them tax-free under certain conditions, after which they can remarry, the state-backed newspaper said.

Government marriage registration offices – which also handle divorces – in China’s commercial hub of Shanghai were swamped by scores of couples this week trying to untie the knot, including at least one pregnant woman, the paper said.

“She told me she came here to avoid the possible loss in a property transaction, and I could say nothing,” it quoted a harried official saying at the registry in the city’s Yangpu district, which saw divorces double.

“I told all of them to come here again for remarriage registration,” he told the newspaper.