METRO SHANGHAI / TWOCENTS
The price of a second roof over our heads
Published: Mar 07, 2013 06:33 PM Updated: Mar 28, 2013 12:03 PM

Friends caustically joke with me that this week's hot topics can be distilled into two words: "breast" or "broom," or rather "br-east" and "b-room," as we shall see.

A separate, sad association with the letter "b" is the story of the 2-month-old baby boy who was murdered in Northeast China's Jilin Province. A man stole the child's family car with the baby left carelessly unattended inside.

Deciding he didn't want to be burdened with the infant, the man mercilessly strangled the boy to death and buried him in a snow-covered field.

The tragedy has provoked nationwide sympathy and outrage, with most people demanding the murderer be given the toughest punishment possible. But there is also concern as to what this incident says about many people's "moral bottom line."

In the longer term, the "b" could also refer to the restrictions on baby milk powder purchases imposed by the Hong Kong government.

As a result of the never-ending scandals in the domestic dairy industry in recent years, mainland parents are sparing no efforts to purchase milk powder from overseas, with Hong Kong being the most convenient destination. However, Hong Kong officials claim the demand is disrupting the island's own milk-market stability.

From March 1, anyone found trying to take more than 1,800 grams of baby milk powder out of Hong Kong will face penalties that could be as much as a 2-year prison sentence.

Friends also point out that the dairy scandal is a phenomenon with very strong Chinese characteristics so it's perfect to use the "br-east" to illustrate this because it ends with the word "east" although this may appear a little unfair to other oriental countries.

The "b-room" of the first sentence was a reference to those residences or shelters, sometimes as small as a single room, in which many of the city's "roomless" population are forced to live.

The Chinese central government has just announced a new series of real estate curbing policies to take effect soon, among which, a 20 percent profit tax will be levied on all secondhand property transactions.

Take my apartment, for example; we bought our 135-square-meter apartment at the price of 500,000 yuan ($80,600) 10 years ago with the help of our families and friends. If we sold it now, for say 3 million yuan, then the profit of 2.5 million yuan would be taxed at the 20 percent rate, meaning that 500,000 yuan would be payable to the taxation administration.

But if we sold it before the policy takes effect, the tax is far more reasonable; in fact it's just 1 percent of the contract price, that is 30,000 yuan.

Our newspaper used the headline "Residents mob real estate offices" to describe the pandemonium of homeowners and buyers rushing to close sales following the tax announcement. Newspapers and websites were awash with photos of throngs of people crowding district-level real estate trading centers, both day and night.

Shanghai has just announced that all house exchange centers will work at full capacity to meet the public demand, including weekends.

And for people who really wish to buy a second home, they also need to think about taking any other necessary action as soon as possible - and that includes divorce.

The divorce case sections in all districts have seen the number of couples filing for divorce this week double, triple and, in some cases, jump by five times the average weekly number.

According to news reports, couples are happily filing for divorces and frankly admitting to staff that they are doing it simply to buy an apartment.

Take my own case again; both me and my husband's names are on the property ownership certificate. That means we have equal ownership of the apartment. If we want to buy a second property, this would be classed as a second-time purchase which would attract tough financial conditions to it.

This would mean we would have to make a higher-percentage down payment on the new property, and the loan interest rate would also be higher than for first-time house buyers.

And if we still wanted to keep our first apartment, and the second one was at least 45 square meters in size, the three of us (including my daughter) would have surpassed the 60-square-meter-per-person rule for the tax-free policy. Any extra square meters will incur the levying of a heavy annual tax.

So if we did want to buy another property, it appears that our best course of action would be to get divorced!

If we divorced, we could say the first apartment belongs to me, and my "ex-husband" therefore becomes a first-time house buyer again, with all the preferential policies that it brings with it.

And when the procedures have all been finalized, we can remarry straight away. In fact the only downside is the stigma of being divorced which might attach to us.

So don't be surprised in China when you hear the question, "have you bought an apartment?" And if the answer is "yes," the follow-up question is then "are you divorced?"

In fact, this is an issue we discuss daily in our household. Like everyone else we would like to improve our lot in life in the property market. But as a generally conservative couple we are resistant to the idea of staging a fake divorce simply in order to achieve this. As yet, nobody is sure whether these policies will effectively curb property prices. But the side effects are already emerging, and in a decidedly "unharmonious" way. Let us hope that the best solutions to these seemingly intractable problems can be found with as little pain as possible in future.



The author is the managing editor of Global Times Metro Shanghai. fengyu@globaltimes.com.cn

Illustration: Chen Xia/GT
Illustration: Chen Xia/GT