@tonyaod
"There are some small consequences to consider when you put a lower sales amount. If the hold the property for 5 years or more before you sell, then it doesn't matter too much, however..."
All you need to do is sell and provide a lower sales amount on the documents.

It is not unusual here for the seller to want an net figure from the sale. As such the buyer often picks up the tax. Another reason for giving a smaller figure on the docs.
Although this is tax evasion, it is normal practice here in Kunming.

@laotou
"1. Individual purchases - Individuals may purchase multiple properties in different cities or areas. As most police databases are not linked - this is a legal blindspot - buyer beware"

As far as I am aware there has been a national land/property register in China for several years. That is why I cannot buy more property.

There is also a new regulation in Kunming, it may be rolling out from BJ, a household cannot purchase a third property any more (even for cash).
In addition, a person cannot get a mortgage in Kunming unless they have paid tax in Kunming for one year. These will cause problems for those who relocate from another city.
Firstly, from what I am told (and if I am wrong, please tell me) if you have 3 properties you will have to sell two in order to buy your new (2nd) property in Kunming.
Secondly, if you have a mortgage in another city, and you sell up, you will still need a new mortgage in Kunming, after you have paid your tax for a year.

tigertiger
3rd property. I was unaware they'd finally linked the RE database - sneaky guys.

MTG
Frankn wasn't interested in a mtg - which tends to complicate things. As mentioned before, businesses are permitted to purchase multiple properties - there are a variety of legal mechanisms (tricks) to do this for foreigners - but it adds to the cost - which is an issue for short-term speculators.

Frankn's not a resident and his question implies he/she's never owned property in China before, whereas most of the local expat population are pseudo-residents - so I'm positive his purchase of real estate will be much more complicated - which is why I strongly recommended he use either a well-known attorney firm or a well-known real-estate agency to help him with his purchase. Frankn will be viewed as a foreign investor trying to push foreign capital into the RE market. Being able to liquidate his investment AND get both his original investment AND any capital gains/losses may be a long-term consideration. There's a not-too complicated way to do this using either operational or business shells from HK or offshore - but he'll need a reputable accountant or attorney (more expensive) to set up this mechanism - and it will require annual tax filings, etc.

Laotou: "...air traffic in Chenggong." I thought new airport going in NE of City about 20 km out. ??????

@tigertiger

There is an official minimum in which you can not sell below. The minimum is based on the location and the type of building of your property, this minimum is revised every year. For example, property inside the first ring road has a minimum of let's say 3000 per SqM (I'm just making up a figure but the official amount is somewhere in the neighborhood). So this means if you paid a million RMB for a 100 SqM apartment, you can not claim to have purchase the house for less than 300,000RMB, usually the agent will recommend you list something like 350,000RMB to be in the comfort zone.

The risk is what would the official minimum be when you are ready to sell. If it is 3100 than you can list 360,000 as the sales price with a profit of 10,000 and pay taxes on that.

However if for some reason the government significantly rise it to 5000, then you would have to pay tax on a net profit of 150,000.

Again, I said small consequence...

Just to clarify things for people who don't know the process.

Does anyone know how the 70 year lease law works in effect? Worst case scenario to me is you buy an apartment on land with, say, 10 years left on the lease. When time is up, some developer buys up the renewed lease. Are you left to accept whatever compensation he offers? -if he even has to offer one. Will your property value fall drastically when you are closing in on the lease expiring date? Will the uncertainty render your apartment/house unsellable until a new lease -and possibly a new "owner"- is found? I imagine the users who've already bought property here know more about it than me (since I know virtually nothing about it any info would do :)

Danmairen,

This is matter that is up for speculation since no land has come up for renewal yet and there is no precedent. Using the market reform in 79 as a guide, foresee-ably the earliest we can see this is in 2049.

Using a layman's understanding of a lease, once a lease is up then unless both parties agrees into a new contract, the property reverts back to the owner which in this case is the State. In face, the Shanghai municipal government has recently cause an uproar by affirming that once the 70 year lease is up, they will take possession of the land without compensation for the improvements on the land.

Current debate in the Central government is to modify the terms so that the land can be re-leased for another 70 year period by paying another leasing fee. How high the fee will be is open to speculation and you can be sure the local government will manipulate it to their favor.

Most of my Chinese friends fall into one of two camps. Either, I'll be too old then (or dead), so I won't worry about it now. Or, you'll never be able to occupy the land for the full 70 years anyway since the government will grab the land (and compensate you meagerly for it) once it becomes valuable enough for them to bother to do so.

Frankn
Apologies in advance - gonna hijack your thread for a moment.

Tonyaod
Thanks for the insight into the minimum price thing.

FYI
When we were shopping for investment vacation properties in Japan - they had the same thing - but minimum property values were based on what they called tax lines. Funny thing about the tax lines is - if you were within the "right side of the tracks", life was good - but we discovered that a property immediately across the 2 meter wide street, on the "other" side of the tax line was a steal at less than half the price. Japan also had both leased land and "free and clear" land that you could own, in addition to "community ownership" for high-density multiple dwelling unit type residences (which means your neighbors can gang up and evict you for being a public or community nuisance) - buyer beware.

70 YEAR LEASE THING
This is designed to maintain the concept of "perpetual construction through planned obsolescence". Under normal real estate law - once the lease expires, you must vacate the property if the lease-holder declines to renew - which you should expect. The lease-holder should therefore compensate you for land improvements - but truthfully - after 70 years - your building (space in the sky actually) has no value as it's probably been fully depreciated (according to US GAAP) and actually only has demolition value (any salvageable fixtures and bricks), which are of negligible value.

So - Dan - you should expect zilch for your heirs - best advice - tell them to trade it for a new apartment/land lease. That's why I say retirement is best in remote rural areas with no golf course/hot spring/amusement park value. The mountainous rural areas of Yunnan are perfect - you get a rural hukou, lines at the police station are non-existent, and as long as the farm is productive - it's inheritable (and did I mention a little laxity on the one-child policy?) - plus you're eligible for some of the benefits that the gov (santa) gives when they want to spur the economy and increase the happiness quotient of the rural communities (discounted appliances, etc). Only one thing - the schools suck (so homeschool) and the infrastructures are weak (electricity, gas, sewage is non-existent, water, etc). On the plus - clean air, the views are SPECTACULAR - ALL THE TIME. Nobody can build in front of you - cuz - well - you're on a mountain top...and it's REALLY STEEP...I could picture gaoxing doing something like this if he were say bitten by the extreme rural yellow fever bug. Did I mention the tax benefits.

Only other drawback - Salvadors et al is a painful commute and they probably won't deliver - although you could try to invite them up for spring break holiday - run a bed & breakfast getaway on the side?

As to location of new airport, GoKunming article of 25 Mar 2010 stated, "Located in the 160-square kilometer airport economic zone about 30 kilometers northeast of downtown Kunming, the airport is expected to become one of the main international hubs in China and serve destinations around the world."

Thanks to all for being so proactive and giving me lots of information, some of it is a bit mind boggling, it does sound like i should find a decent (English speaking) experienced professional to assist me with the process, can anyone suggest such a person or firm.

I am fortunate to have the support of 2 developers who have offered me properties, but neither have previously sold to a foreigner, and both have suggest that I get independent advice as they don't wish to guide me in the wrong direction that will ultimately cause me problems and ultimately jeopardise our friendship and business relationship.

It is only one property I'm interested in buying for personal use while I'm in Kunming, and I don't own or ever have owned property in China previously, there will be no loans or any type of financing either, but I'm only interested in a small apartment so cost won't be over 1M rmb, I write this only to clarify some of the comments of those that have participated in my thread.

Again many thanks to all of your for your participation.

what in the world happened to this thread? I was reading it eagerly until the last 3 or so posts when it changed topic completely.

Anyway, if Frankn did ever get some help with a RE agent who could help I'd really like to know that also. I'm a foreigner who succeeded in buying an apartment several years ago and now i want to sell in the next year. My original helpful agent has left Kunming and I have lots of questions regarding the 5 year hold and the types of taxes I'd have to pay on sale.

Help?