In China's Nanjing, capital of Jiangsu province, a partner in a couple who wants to obtain part ownership of property that had belonged to the other partner before they were married will have to pay a tax. [File photo] |
Do you want to share the ownership of property that officially belongs to your spouse or his or her family by adding your name to an ownership certificate? If that's the case and you live in this city in East China, you will probably have to pay a tax.
A partner in a couple who wants to obtain part ownership of property that had belonged to the other partner before they were married will have to pay a tax that took effect on Tuesday, according to a regulation adopted by Nanjing, capital of Jiangsu province.
The tax will be charged at a rate of 3 percent. It will only apply to the portion of a property that belongs to a partner in a couple who does not have his or her name on the property's ownership certificate.
Take an example of an unmarried Nanjing couple who bought a 1-million-yuan ($156,000) house. The man paid 600,000 yuan for it and the woman 400,000 yuan, but only the man put his name on the property certificate.
When the couple gets married, though, the woman decides she wanted her name added to protect her interest in the house. She now must pay 12,000 yuan - 0.03 multiplied by 400,000 - in tax.
Before the policy took effect, it cost nothing to add a name to a property-ownership certificate.
Those, meanwhile, who buy property after getting married will not have to pay such a tax. The policy change has drawn complaints from the public.
Many Nanjing residents argue the new rule looks like "looting", since it was adopted right after new interpretations of the Marriage Law were issued on Aug 13.
The interpretations stipulate that real estate bought before marriage by one partner in a couple belongs to that partner alone. The property will not, in other words, belong jointly to the couple, meaning the person whose name is not on the ownership certificate will get nothing from it if there is a divorce.
Nanjing real estate management authorities said many residents, especially women, have asked in the past two weeks about what they should do to have their names added to property ownership certificates.
"All of a sudden I need to pay a tax when I just want to confirm my ownership of my property by adding my name to the certificate," said Li Yu, a 23-year-old woman in Nanjing who got married last month.
In response, a source with the Nanjing tax authority, who requested anonymity, said those who add their names to the ownership certificates of property that had belonged solely to someone else are effectively shifting the ownership of that property. They should therefore be taxed in accordance with the People's Republic of China's provisional regulations on contract taxes.
The source in the tax authority said that no official guidance has been released saying how the new rule will be enforced.
For some, the tax is a cause of worry.
"I regret that I did not complete the process this past week, and now I have to pay an extra 20,000 yuan to do the same thing," said a 43-year-old resident who declined to give his full name. He said his wife has pressured him to put her name on the ownership certificate for their downtown apartment.
Nanjing is among the first Chinese cities to impose taxes on couples who shift the ownership of property in this way. Chengdu, in Sichuan province, and Qingdao, Shandong province, have adopted similar policies.
According to a notice posted on Wednesday on the Nanjing tax authority's official website, Nanjing tax officials have already informed their superiors about the details of the new tax policy.
The notice said the State Administration of Taxation is making detailed rules, which may be adopted in more places in the country.
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