China Families Divorcing to Lower Property Tax

As property taxes in China continue to climb, so too the divorce rate among China’s couples continues to hit new heights. 

The higher property taxes are for second homes, so Chinese couples are divorcing to put one house in the husband’s name and another house in the wife’s name–thereby avoiding the 20 percent value tax they would owe if they owned the second home together.

According to ChinaDailyUSA, couples in China face what are known as the “Five Regulations” on property. These require that when “people who sell an owner occupied home that is not the only home he or she has owned for no less than five years, the owner has to pay 20 percent of their individual income tax.” Because of this, many families with a second home “choose to have a divorce to avoid the high tax.” 

During the first three quarters of 2013 there were “39,075 cases of divorce registration” in China. This is up “40 percent” in one year.

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