Housing

Both parties can bring along the following documents to the local real estate management bureau to go through necessary procedures:

1. For properties received as a gift, the following documents are required:

• title certificate or real estate certificate of the original property;
• gift deed and its notarial certificate; and
• deed tax-paid certificate.

2. For inherited properties, the following procedures, documents and materials are applicable:

• title certificate of the original property, lawful successor’s Home Return Permit and Identity Card, and documentation of family relationship (relationship with the property owner, name and occupation of the person concerned, etc);
• if the relevant procedures are handled in the Mainland, please first complete notarisation procedures at the local notarial office. The property owner and his/her spouse and the lawful successor should be present. If the property owner or his/her spouse is deceased, a death certificate should be presented;
• if a Hong Kong resident is among the ancestors or successors, it is necessary to approach Hong Kong lawyers appointed by the Ministry of Justice of the People’s Republic of China as China-Appointed Attesting Officers for preparing documentary proof of family relationship before going through notarisation formalities for inheritance at the local notarial office. The notarisation fee is set at 2% of the property valuation;
• lawful successors who give up inheritance rights of their own accord should bring along their Identity Card (as well as Home Return Permit for Hong Kong residents) to the notarial office for completing notarisation formalities of giving up inheritance rights;
• upon completion of all notarisation formalities, please approach the local land resource and real estate management bureau to go through formalities for transfer of property ownership.

Taxes and fees for ordinary residential properties mainly include: transaction fee, property ownership registration fee, deed tax, stamp duty, land appreciation tax, individual income tax, value-added tax, and land-transferring fee etc. The more substantial ones include:

1. value-added tax and surcharge on transfer of property ownership: for properties bought for less than two years, a value-added tax is levied based on the assignment value or transaction price (assignment value or transaction price/(1+5%) × 5%); for properties bought for two years or longer, ordinary residential properties _{(see note below)} are exempt from a value-added tax, while non-ordinary residential properties_{(see note below)} are subject to a value-added tax at 5% of the difference;
2. individual income tax on transfer of property ownership: 20% of the proceeds on an actual basis: (proceeds from each transfer of property ownership, i.e. property’s original value - reasonable fees) × 20%;
3. deed tax: generally 3% of the transaction price (for an ordinary residential property purchased by an individual as the family’s only housing, the tax is reduced by half, i.e. 1.5%; for an ordinary residential property with an area of 90 square metres or below which is purchased by an individual as the family’s only housing, the tax rate is 1%).

(Note: A non-ordinary residential property refers to a property with “a gross floor area over 144 square metres, a plot ratio less than 1.0 and an actual transaction price that is 1.2 times higher than the average transaction price of residential properties on the same grade of land”, while the others are considered ordinary residential properties.)

According to relevant provisions in the Regulations on the Lease of the Property in Towns and Cities in the Guangdong Province, the following nine types of properties should not be rented out:

1. properties without title certificate and proof of legal rights;
2. properties with disputes over ownership;
3. properties with attachment or other forms of restrictions on ownership determined or decided by judicial or executive authorities in accordance with the law;
4. jointly-owned properties without written consent from other co-owners;
5. properties that are illegally constructed;
6. properties that are considered dangerous;
7. properties that fail to meet fire safety standards;
8. properties issued with a demolition notice; and
9. properties barred from being rented out under other laws, regulations and rules.