Although Beijing's underground housing rent market has flourished for as long as 10 years, it is the first time the authorities heed its existence and give the legal sign of ``go-ahead.''

Not all the housings dwelled by Beijingers are eligible for rental, the city policy said. One prerequisite is that the residents must have the property ownership certificate.

Those who have bought their houses at a price lower than the government subsidized prices cannot rent their housing units to others. Also, housing cannot be rented for business uses or to people the public security department deems not appropriate for renting.

The Chinese government began to stop welfare distribution of public housing in June 1998, and let employees of government department and state enterprises buy their dwellings at a subsidized price. The measure is in keeping with the nationwide drive of market reform and privatization.

Under the new rules, the house owners and renters can make deals and discuss the price of the housing units themselves. But house owners should pay major taxes, including income taxes, stamp taxes, and business taxes.

The rental contract is equally binding to the two sides and will be protected by the new rules.

In China, housing had been allocated to workers and government servants as a kind of welfare for many years. Limited fees were paid for living in the house, however, the property right of the house belong to the government. Individuals have not the right to trade or rent their houses.

Beginning from last year, new rules was launched to permit house owners in Beijing to trade their public houses after purchasing the property right at the government subsidized price. However, theoretically, renting of public house is not permited by law, since there is no specific rules to formally regulate the rent of this kind of houses.

Therefore, house owners and renters can only made deals in a secret way, thus was not protected by law, and needn't pay relevant taxes.

(China Daily 12/01/2000)