Date
25 April 2018

Tax strategy seen behind spike in divorces, paper says

Divorce rate in Beijing has increased by more than 40 percent in the first three quarters of this year from the same period last year, with observers attributing the spike to a strategy being adopted by couples to avoid a property tax imposed earlier this year, China Daily reported Wednesday. In March, China introduced a 20 percent individual income tax on capital gains by home sellers. The tax hike increased the cost of existing second-hand home transactions and affected speculative purchases in the property market. However, the regulations allow couples with two properties who divorce and put one house in a former spouse’s name to sell their residential property tax-free under certain conditions, the report noted. After availing the tax benefit, the couples can then later remarry, it pointed out.

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