Relaxed restrictions in China

August 28, 2015 — Earlier this month, Mainland authorities relaxed restrictions on foreigners purchasing real estate in China. The change scrapped a requirement that non-Chinese people live in China for one year before they could buy a home.

The amendment makes it easier for end-users to buy property. But this is a national level change, and city-level residency requirements remain in force. This will continue to be an issue for people wanting to buy a home in China’s tier 1 cities: Beijing, Guangzhou, Shanghai and Shenzhen.

Circular 171
In July 2006, the central government promulgated “Opinions on Regulating the Entry into the  Administration of Foreign Investment in the Real Estate Market.” Known as Circular 171, the regulation required that foreigners live legally in China for one year before they could buy a single home. The house or apartment could only be used as the buyer’s residence, and could not be rented out. In addition, the buyer had to be properly registered in China, with a work permit or student visa. That eliminated people who entered the country on a tourist visa and worked illegally.

Circular 186
Foreigners buying property in China should also be aware of “The Circular on Further Regularizing the administration of Real Estate Purchases by Foreign Entities and Individuals.”  Known as Circular 186, this regulation was promulgated in November 2010.

The official announcement from China’s Ministry of Commerce is available in Chinese here. Additional background on the change is available from Wall Street Journal.