What happens to Chinese home after owner becomes US citizen?

[bairen]

In December 2010 I brought my Chinese citizen fiancee over to the USA via K1 visa and married her. Just this month she received her conditional permanent resident status (green card). She still owns her condo in Tangu/Teda Tianjin.

 

I have read around that foreigners are only allowed to own property in China in certain areas, property that foreigners own in restricted areas can be seized by the government. Is Tangu/Teda Tianjin an approved area for foreigners to own property? If not, when my wife becomes a US citizen in 3 years will her condo in Tianjin be seized because she is a foreigner or will she be grandfathered in?

 

Also, I have heard that foreigners are not allowed to conduct business in China unless partnered with a Chinese person/entity or incorporated into a Chinese corporation, and that this rule extends to leasing out a property. My wife and I are looking into leasing out her condo in Tianjin. If it is leased out at the point when she becomes a US citizen will we have to incorporate into a Chinese corporation to conduct that leasing business.

 

I realize these questions are peculiar but information on this subject seems to be sparse and far between. I appreciate any and all input, thank you!

[2mike&jin]

In December 2010 I brought my Chinese citizen fiancee over to the USA via K1 visa and married her. Just this month she received her conditional permanent resident status (green card). She still owns her condo in Tangu/Teda Tianjin.

 

I have read around that foreigners are only allowed to own property in China in certain areas, property that foreigners own in restricted areas can be seized by the government. Is Tangu/Teda Tianjin an approved area for foreigners to own property? If not, when my wife becomes a US citizen in 3 years will her condo in Tianjin be seized because she is a foreigner or will she be grandfathered in?

 

Also, I have heard that foreigners are not allowed to conduct business in China unless partnered with a Chinese person/entity or incorporated into a Chinese corporation, and that this rule extends to leasing out a property. My wife and I are looking into leasing out her condo in Tianjin. If it is leased out at the point when she becomes a US citizen will we have to incorporate into a Chinese corporation to conduct that leasing business.

 

I realize these questions are peculiar but information on this subject seems to be sparse and far between. I appreciate any and all input, thank you!

 

 

I suppose most would not want to answer this because of the "differences" in local rules, habits and practice. But, having discounted the fact of a "specific" location - first you need to think through the issue. Forget all the urban myth associated with doing business and/or owning property in China. Yes, there are restrictions in various areas, but for the most part - a person, even a Foreigner can own property in China. Now having said that, there are "three things" that will impact the property - over time. The place that she has her Hukou, her citizenship, and any act that might trigger examination of ownership and or control. No one on this site can answer what the "local issues might be".

 

However, in general .....having a citizenship change is NOT going to affect a change in the ownership. It is "usually" only associated under some conditions when you are buying or selling. (I.e. tax, down payment, authorization for foreigners to buy, taxation, etc). Yes, my wife also has several pieces of "ownership" in CHina, having just disposed of her deeded "parking space" this last fall. If I wanted to know the exact answer from the exact location in China - I would contact a real estate lawyer in the Province/Town and ask the questions about the "Impact of becomming a USC", in light of property ownership. My gut reaction is NOTHING is going to happen - but you get what you pay for - free advice may be worthless when dealing with specifics in China.

 

What are we doing? My wife's Hukou (Family Registration) is held in the same Town, Province that the home is in - and she is her OWN Hukou holder, qualified as Head Of Household based on owned property being in excess of 170M2. It makes things "clean" but sometimes not easier. The Passport is a "Travel Document" and is NOT used in transactions for real estate, hospital, school, or any other "Business Transaction" or proof of Identification. It all falls back on the ID CARD. So, for now....she is a citizen and we have 1.5 years to go before she is eligible for for Citizenship, which we will do immediately because of US estate laws - which are drastically biased against foreign spouses. When that time comes - she will also have 5 years of holding the property - making it eligible for a NO TAX SALE. We might Sell it, prior to the citizenship, but most likely will NOT. I view it as an emergency backstop for her, and desire that she retain it - as it costs little to maintain. Am I worried about the Citizenship Ownership issue -NO, because it is Xiamen, and they must have 50,000+ Laowei there. The entire next Tier in our complex is "for foreigners only", and many have some of the old single family dwellings by the lake - now priced out of this world and being converted to coffee houses! For our city - it's a no brainer - you need to understand the specifics for your city - but I think nothing will happen - and even at a potential sale time - you might have to pay a small transfer tax (I've see 2-5% when I lived in China). NO matter what, a real estate lawyer in China will tell you the current practice in her city/province. Best of Luck.

Edited March 30, 2011 by 2mike&jin (see edit history)

[bairen]

In December 2010 I brought my Chinese citizen fiancee over to the USA via K1 visa and married her. Just this month she received her conditional permanent resident status (green card). She still owns her condo in Tangu/Teda Tianjin.

 

I have read around that foreigners are only allowed to own property in China in certain areas, property that foreigners own in restricted areas can be seized by the government. Is Tangu/Teda Tianjin an approved area for foreigners to own property? If not, when my wife becomes a US citizen in 3 years will her condo in Tianjin be seized because she is a foreigner or will she be grandfathered in?

 

Also, I have heard that foreigners are not allowed to conduct business in China unless partnered with a Chinese person/entity or incorporated into a Chinese corporation, and that this rule extends to leasing out a property. My wife and I are looking into leasing out her condo in Tianjin. If it is leased out at the point when she becomes a US citizen will we have to incorporate into a Chinese corporation to conduct that leasing business.

 

I realize these questions are peculiar but information on this subject seems to be sparse and far between. I appreciate any and all input, thank you!

 

 

I suppose most would not want to answer this because of the "differences" in local rules, habits and practice. But, having discounted the fact of a "specific" location - first you need to think through the issue. Forget all the urban myth associated with doing business and/or owning property in China. Yes, there are restrictions in various areas, but for the most part - a person, even a Foreigner can own property in China. Now having said that, there are "three things" that will impact the property - over time. The place that she has her Hukou, her citizenship, and any act that might trigger examination of ownership and or control. No one on this site can answer what the "local issues might be".

 

However, in general .....having a citizenship change is NOT going to affect a change in the ownership. It is "usually" only associated under some conditions when you are buying or selling. (I.e. tax, down payment, authorization for foreigners to buy, taxation, etc). Yes, my wife also has several pieces of "ownership" in CHina, having just disposed of her deeded "parking space" this last fall. If I wanted to know the exact answer from the exact location in China - I would contact a real estate lawyer in the Province/Town and ask the questions about the "Impact of becomming a USC", in light of property ownership. My gut reaction is NOTHING is going to happen - but you get what you pay for - free advice may be worthless when dealing with specifics in China.

 

What are we doing? My wife's Hukou (Family Registration) is held in the same Town, Province that the home is in - and she is her OWN Hukou holder, qualified as Head Of Household based on owned property being in excess of 170M2. It makes things "clean" but sometimes not easier. The Passport is a "Travel Document" and is NOT used in transactions for real estate, hospital, school, or any other "Business Transaction" or proof of Identification. It all falls back on the ID CARD. So, for now....she is a citizen and we have 1.5 years to go before she is eligible for for Citizenship, which we will do immediately because of US estate laws - which are drastically biased against foreign spouses. When that time comes - she will also have 5 years of holding the property - making it eligible for a NO TAX SALE. We might Sell it, prior to the citizenship, but most likely will NOT. I view it as an emergency backstop for her, and desire that she retain it - as it costs little to maintain. Am I worried about the Citizenship Ownership issue -NO, because it is Xiamen, and they must have 50,000+ Laowei there. The entire next Tier in our complex is "for foreigners only", and many have some of the old single family dwellings by the lake - now priced out of this world and being converted to coffee houses! For our city - it's a no brainer - you need to understand the specifics for your city - but I think nothing will happen - and even at a potential sale time - you might have to pay a small transfer tax (I've see 2-5% when I lived in China). NO matter what, a real estate lawyer in China will tell you the current practice in her city/province. Best of Luck.

 

I agree, when dealing with large sums of money or property getting a lawyer's advice is usually a safe rule of thumb to have. Or perhaps just signing the condo over to my mother-in-law who lives an hour away from the property might even by a simpler way to handle it if we decide to keep it. I greatly appreciate the amount of detail and examples you gave me in your response; highly useful, Thank you!