Beijing’s divorce rate has soared as couples seek to avoid a property tax imposed earlier this year by using a loophole for those whose marriages end, according to state media.
About 40 000 couples divorced in the Chinese capital in the first nine months of the year, 41 percent up on the same period last year, the Beijing Youth Daily reported yesterday, citing official figures.
In March, China introduced a nationwide capital gains tax of 20 percent on the profits owners make from selling residences. But the terms allow couples with two properties who divorce and put each house into a different partner’s name to sell them tax-free under certain conditions – after which they can remarry.
Homeowners were previously taxed at just 1 percent or 2 percent of the sale price.
The growth rate in divorces was “far higher” than in the previous four years, the paper noted.
Couples in other first-tier cities, where property prices have rocketed in recent years, had also turned to the practice to avoid the capital gains tax, which could amount to tens of thousands of dollars, the paper said.
Authorities have sought for the past three years to control the rise of property prices. As well as capital gains tax, other measures have included restrictions on purchases of second and third homes, higher minimum down payments and taxes on multiple and non-locally owned homes in some cities. – Sapa-AFP