How to Sell your Properties in China?
How to sell your Chinese property as a foreign owner? What is the specific process for non-Chinese citizens to sell their properties in China? What kind of legal services an attorney can provide in a foreign-related real estate transaction?
Here we will briefly introduce four steps about how a non-Chinese citizen sells his property in China, which are as follows:
Step 1: Signing Engagement Letter
Find interested buyers and appoint an attorney to help you during the sales of your property in China. This step needs you to prepare a power of attorney, and instruct and authorize the attorney to represent you to settle relevant issues in this transaction. The power of attorney shall be notarized by the local notary officeof your nationality and shall be authenticated by the Chinese Embassy in your country.
Step 2: Signing Sales Contract
Enter into Sales Contract and Deposit Agreement with the buyer, after which the buyer shall pay the deposit to you. In this stage, you need to prepare certificate of property and the owner’s ID card. If the owner of the property can not make it to show up, power of attorney will be necessary. Besides, if ownership is shared by couple in marriage, a proof of an agreement reached by both parties of marriage to sell the property need to be provided.
Step 3: Examination and Verification
At this stage, the buyer is required to do an assessment to confirm that he/her has the local qualification to purchase the property, and the seller is required to do a property verification, ensuring the property ownership is clear without any mortgage.
Step 4: Online Registration
Online Registration after signing a formal sale contract of property, which is a compulsory step issued by the real estate management department requirement. After this registration, one property can never be sold for twice, and the risk of “one house, two sales” can be eliminated.
Step 5: Payment
1) If the buyer conducts payment in full. The seller shall set up a Chinese bank account, then the buyer shall transfer money into this seller’s bank account. The bank will temporarily freeze this payment until the process of changing the name of property is completed.
2) If the buyer pays with a loan. The buyer shall apply for a mortgage loan from the bank and transfer the downpayment to a supervision account of the bank. The seller shall ensure that the mentioned application for a mortgage loan has been approved by the bank before changing the name of the property.
Step 6: Paying tax & Changing the name of property
Both the buyer and the seller/your attorney shall go to the local Real Estate Transaction Management Center to change the ownership of the property. During this step, you (as the seller) may need to prepare the Power of Attorney, relevant certificate of notarization or authentication, a certificate of the ownership of your house, your passport or any other certificate of identification for the application of ownership modification. In addition, foreigner owner is also required to pay relevant taxes for selling their real estate in China. More specifically, you need to pay relevant taxes in this transaction, such as sale tax(approximately 5% of total selling price), stamp tax (approximately 0.05% of total selling price), etc.
Step7: Obtaining Real Estate Certificate
If the buyer purchase the property with a loan, a mortgage registration will be required after obtaining Real Estate Certificate, only after which the bank will loan relevant amount of the said mortgage.
Step 8: Property Delivery
The seller shall settle all property expenses (such as property management fees, fees for water and electricity, etc) and provide the keys to the buyer after receiving the loan from the bank.
Legal services provided by a professional attorney in a foreign-related real estate transaction can be divided into the following:
1) Representing foreign sellers (hereinafter the “clients”) to handle and settle the whole procedure of the transaction, including participating in reaching a sale contract with the buyer, reviewing the contract and any other related materials and providing professional advice to clients regarding legal issues during the transaction.
2) Providing Legal Opinion Letter, analyzing relevant legal risks.
3) Dispute Resolution, including settling the dispute arisen from real estate transaction, drafting and sending a Letter of Demand, representing clients to file a litigation or arbitration, etc.
For more professional information and suggestions about how to sell your property located in China, please contact Landing Law Offices to speak with one of our experienced Chinese lawyers.
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