1. Financial Requirements: Property Prices & Loans

Buying property in China requires substantial upfront capital. For example, in central Shanghai, the average price reaches 15,000 USD per square meter; even on the city’s outskirts, prices start at around 7,000 USD per square meter—on par with expensive urban areas in developed countries.

Chinese banks rarely offer favorable loan terms to foreign buyers:

• The down payment requirement is typically 30% of the total purchase price.
• Mortgage rates are relatively high, and contracts include strict clauses. For instance, HSBC’s foreigner-specific clauses state: “A Letter of Undertaking to confirm awareness and acceptance of risks from regulatory updates, including unconfirmed loan amendments or cancellations.”

2. Key Parameters: Down Payment, Loan Term & Risks

Foreign buyers must adhere to the following core rules:

• Upfront down payment: 30% of the property value.
• Loan repayment term: Up to 30 years.

3. Legal Procedures & Documentation

Foreign buyers face more complex paperwork than Western counterparts. The basic requirements and steps are:

• Eligibility proof: Foreigners must provide evidence of legal employment in China and at least 12 months of residency.
• Hiring an agent: Most buyers use a local agent to handle property searches and paperwork. Agents simplify the process but require a service fee; building trust (“guanxi”) with the agent is key.
• Contract negotiation: Draft a purchase contract to confirm price, payment schedule, and terms—agent assistance is strongly recommended.
• Good-faith deposit: Upon seller agreement, pay 1% of the total price as a deposit.
• Contract validation: Notarize the contract and obtain government approval.
• Taxes & fees: Pay several percentage points of the purchase price in taxes for registration and deed transfer (varies by local government rules).

4. Land Lease & Usage Rights

A critical point for foreign buyers: The Chinese government owns all land and leases it for 70-year terms (for residential use) to individuals and businesses. This regulation was established in the 1988 Constitutional Amendment, with the first leases expiring in the late 2050s—outcomes remain untested.

Key rules for land rights:

• Land-use rights are generally renewable, but the government retains the right to repossess land for public needs (with compensation).
• If the land-lease holder fails to reapply 1 year before expiration, the government can repossess the land without compensation.

In summary: Foreign buyers own the property structure but not the land. Maintaining up-to-date documentation is essential.

5. Selling Property in China

The selling process mirrors the buying process (in reverse) and also benefits from an agent’s assistance. Sellers are responsible for transaction fees, land-use taxes, and other minor costs.

For foreign sellers transferring funds overseas:

• Provide proof that the funds originate from property sales.
• Obtain approval from the State Administration of Foreign Exchange (SAFE).

Note: This guide is not exhaustive—fully understanding China’s property legal framework requires extensive research. Financially qualified buyers typically hire professionals to handle administrative tasks.