Sun, Feb 04, 2007 - Page 11 News List

Foreigners limited to one home under new Beijing rules

AP , BEIJING

Foreigners in Beijing will be limited to buying a single home for their own use under new curbs imposed amid efforts to slow a surge in housing costs, newspapers reported yesterday.

Foreign home-buyers in Beijing will have to prove they have lived in China for a year for work or study, and will be barred from renting out the property, the Beijing Morning Post and China Daily newspapers said.

China's government is trying to restrain a jump in housing prices and cool an investment boom that Chinese leaders worry could spark inflation or a financial crisis.

Beijing has mainland China's largest population of long-term foreign residents, including tens of thousands of Western and Asian businesspeople, diplomats and others. The reports gave no indication whether other cities would impose similar curbs.

The communist government began allowing Chinese families to buy homes in the 1990s, and later let foreigners buy real estate.

The government still officially owns all land in China, but buyers of apartments and houses receive deeds valid for up to 70 years.

The government warned in July last year that it would restrict foreigners' purchases in an effort to restrain prices and ensure adequate supplies of low-cost housing.

Restrictions in the capital also apply to buyers from Hong Kong and Macau, which are Chinese territory but are treated as foreign economies by regulators, according to the reports.

Spending by developers on apartments, office buildings and other real estate projects nationwide jumped by 21.8 percent last year, according to the government.

Under a measure that took effect on Thursday, developers will pay a value-added tax of up to 60 percent on new projects.

Chinese leaders also worry that heavy spending on real estate, fueled by easy bank credit, could ignite inflation or cause a debt crisis if builders of ill-conceived projects default on their loans.

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