In China, A Divorce can Help You Buy a Second Home

by Savitha C Muppala on  May 14, 2010 at 4:34 PM General Health News
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Guoliang, 42, is keen on divorcing his wife, in order to buy a second home.

His decision came after the Chinese government imposed restrictions on a family purchasing a second home, in a bid to curb property speculation.
 In China, A Divorce can Help You Buy a Second Home
In China, A Divorce can Help You Buy a Second Home

According to reports by English.news.cn, a divorce could reduce the couple's down payment by 140,000 yuan (20,505 U.S. dollars) and mortgage payments by 100,000 yuan, said Li, who is considering buying a 720,000 yuan second home for investment in Changsha, the capital of central Hunan Province.

In mid-April, the State Council, or the Cabinet, ordered banks nationwide to raise the down payment for a family to buy a second home to a minimum 50 percent of the value from 40 percent, with a mortgage rate no less than 1.1 times the benchmark interest rate.

"After we get divorced, my wife will claim our house, so that I can apply for a mortgage as a first-home buyer since I don't have a house under my name. And we will remarry after that," Li said, adding that he got the idea from a real estate agency.

Chen Ping, a real estate agent in Changsha, has helped many couples apply for the preferential mortgage for the first-home buyer through a "fake divorce," which was "legitimate and viable, just like reasonable tax avoidance."

Seemingly a risk free procedure, Feng Kun, a lawyer with the Changsha-based Xiangsheng Law Office, warns that there could be unseen repercussions.

"What if your spouse changes his or her mind and refuses to remarry? It would be a big blow," Feng said.

Source: ANI
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