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Chinese couples rush to divorce in the wake of property tax crackdown

The divorce rate in districts of China has jumped, reaching one every five minutes in districts of Shanghai, after the Chinese government announced a crackdown on property speculation.

Last Friday the government told local districts to more aggressively enforce existing laws designed to discourage the buying and selling of property and slow down a relentless rise in house prices. Under the new crackdown, anyone with a second home will have to pay 20 per cent capital gains tax on sale profits.

Chinese couples with more than one property rushed to local marriage registration centres in the wake of the announcement, in the belief that, following a quick, uncontested divorce, they would be able to exploit a loophole allowing properties placed in separate names to be sold without paying the tax. They would then remarry.

The Zhabei district in Shanghai saw 53 divorces in a single day earlier this week, Reuters reports, with similar surges in the cities of Wuhan, Nanjing and Ningbo.

One official in the Yangpu district marriage registration office told the Shanghai Daily that some couples had been advised to return to the office to be remarried after completing their divorce.

Li Li, the managing director of Shanghai real estate consultancy International Strategic Group, said: “It’s a practical attitude. It’s strange, but policy forces people to do it.”

Property speculation is popular in China as there are few other investment opportunities open to people with money available.

Meanwhile many Chinese women are failing to provide sufficient evidence of their husband’s misconduct in divorce cases, the Beijing Second Intermediate People’s Court has claimed.

In a majority of the 595 divorce case it tried in 2012, the court said, women were at a disadvantage as they could not provide legally admissible evidence of adultery or domestic violence, the two most common reasons given for seeking a divorce.

The Intermediate People’s Court explained:

“In one case, the wife caught her husband having an affair, but this made her so emotional that she forgot to keep any evidence or records. Although she provided voice messages and online chat text messages between her husband and his mistress, they were regarded as low credibility evidence by the court. The court believes women’s rights should be defended, but this evidence was not enough.”

Under Chinese law, courts can order additional compensation where domestic violence or adultery has been proven by one party in a divorce.

The blog team at Stowe is a group of writers based across our family law offices who share their advice on the wellbeing and emotional aspects of divorce or separation from personal experience. As well as pieces from our family law solicitors, guest contributors also regularly contribute to share their knowledge.

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