There has been a surge in divorces in China. But they’re not being driven by unhappy marriages.Chinese couples are getting divorced to take advantage of loopholes that will let them sell properties tax free, under certain conditions, according to the Shanghai Daily.
This comes after the government published an online notice on Friday stating that homeowners who sell their homes will be taxed 20 per cent on the profit they make.
Properties that were purchased as a couple’s only home five years ago are not subject to the tax when resold. To take advantage of this, couples are getting divorced and taking one property each, this then allows them to sell one of the homes tax-free.
The Shanghai Daily said wedding registrars confirmed that “the dramatic surge was triggered by the central government’s property curbs announcement last week”. They also said couples were remarrying as soon as the sales were completed.
The registration centre in Zhabei District saw a record 53 divorces on Tuesday. It also saw 250 people applying for proof that they are single, up from the typical 60 – 70.The Changning District said its divorce rate was up 30 per cent on Monday and the registration in the Yangpu District reported twice the normal number of divorces.
What’s more? While some couples ‘faked’ unhappiness, some were up front about getting divorced to take advantage of the loophole.
But this isn’t the first time we’ve seen such headlines however. Back in 2011, Chinese couples were splitting up to avoid the ban on a third mortgage.
For now it seems as though China’s plan has backfired with sales picking up and prices increasing.
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