Since China’s housing is currently the least affordable in the world, owning property in the country’s cities is one of the biggest worries for Chinese. A new policy was introduced earlier this year by the government in hopes of bringing down housing prices: a 20 percent capital gains tax on sales of second homes and a 60 percent increase on the tax levied on couples who purchased second homes. This change, however, has caused another problem, and led to the nationwide phenomenon of an increase in the number of divorces. IB Times explains how couples are getting divorces because of the policy’s loophole:
“Divorced couples could avoid the new taxes. Naturally, an untold number of Chinese homeowners who wanted to sell their homes or wanted to buy a second home decided it was time to divorce – temporarily – to dodge the tax man. If each spouse in a family that owned two homes divorced, so the reasoning went, then each spouse would own one of the homes and could sell that home without facing the new punitive tax. Likewise, if each spouse in a family that already owned one home divorced, this would allow one of the spouses to buy another home without paying the 60 percent tax. And, voila, once the deal gets done — with only a 1 percent or 2 percent tax — the couple remarries.”
The city of Nanjing is one of the cities that has become overwhelmed with the increase in the number of divorces. A local newspaper lists the statistics:
“From January to June, 2013:
In Nanjing, 44,944 couples got married.
18,311 couples got divorced.
Duuring the year of 2012:
78,106 couples got married.
23,143 couples got divorced.”
In half a year, the number of divorces has already reached 79% of last year’s number. Nanjing’s civil office is so busy that it has introduced a policy to limit divorce applications, Global Times reports:
“Nanjing government in East China’s Jiangsu Province has introduced a policy that restricts the number of divorces that can be registered every day.
The move comes as couples have rushed to file for divorce to circumvent regulations that limit the number of properties couples can buy and forbids children from attending schools outside their own residential district.“
Nanjing’s Gulou district claims that this was only exercised because there were days when the office was overwhelmed by the surge in divorce applications. Since the office closes at 4PM, couples that couldn’t fit in on a busy day had to be moved to the following day. The first work day after the Dragon Boat Festival’s 3 day holiday, the office processed 55 divorce applications.
The decision to file for divorce seems to be related to parents’ concern for their children’s future:
“A Nanjing resident, surnamed Lin, told the Modern Express that she filed for her second ‘temporary’ divorce on June 14 this year to help her son get into a better primary school.
‘The district school where we reside is not very good. So I decided to ‘divorce’ my husband and move my household registration, together with my son’s, back to my parents’ area, which has a better school,’ said Lin.
Netizens were amazed at how even getting a divorce is becoming so competitive:
ghf7703: Because of housing purchase and resale in 2013, Nanjing sees a divorce phenomenon. Everyone gets a divorce happily, divorcing is no longer a painful matter!
三宫消费: How will Chinese remember this history years later? Maybe this: An old lady asks her husband, how many times have you been divorced? The guy answers: I can’t remember, but many staff members that processed my divorce applications have retired already.
lhbsdt: Good policies mold bad guys into good people, bad policies forces good people to become bad.