Moves to curb house prices trigger fake divorces in Shanghai
April 17, 2013 Leave a comment
Moves to curb house prices trigger fake divorces in Shanghai
Staff Reporter, 2013-04-16
China’s recent attempts to cool the country’s overheated housing market have triggered a wave of phony divorces in Shanghai, with critics questioning the long-term effectiveness of government attempts to hold down soaring prices.
Jiahegongcheng, a Chinese non-profit offering marriage consultancy, said it had recently provided services to many couples staging a fake divorce in order to sidestep restrictions and purchase an additional home. The trend began after the Shanghai government limited families to buying only one additional new home among other measures started in 2010.
There were 43,964 couples in Shanghai which filed for divorce in 2012 and 8,068 of them later remarried, according to statistics.
Fake divorce has become a common way to avoid the law, and the government should not allow the trend to continue, said Hu Zonggen, a real estate consultant based in Shanghai. He suggested during a conference in March that the city should address the issue by banning new home purchases to people in their first year after a divorce.Meng Xiaosu, former chairman of the China National Real Estate Development Group, suggested at the same conference that increasing the housing supply would help control an overheated market.
An increase in the supply of secondhand homes would help the supply issue, but it will only happen by cancelling the new 20% capital gains tax imposed on March 1 when owners sell a property, Hu said. If the tax is enforced strictly, it will likely push housing prices higher. Housing prices in some first-tier cities had jumped another 10%-20% over the past two months.
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