Chinese Couples Divorce En Masse To Avoid Home Sales Taxes
Reuters has reported that officials at a Shanghai marriage registration center divorced 53 couples in a single day. These are only a handful of hundreds who have been filing for divorce in order to avoid paying increased taxes on home sales. The divorces, costing just a few Chinese Yuan, make the overall process extremely affordable considering the amount that the couples will be saving in the long run. For reference, a Yuan equals 16 American cents. The couples begin by divorcing, and then evenly split assets and properties before selling them. The process allows the divorcees to avoid paying capital gains taxes totaling as much as twenty percent.
In China, citizens tend to invest mostly in real estate, resulting in rising home prices throughout the nation’s largest cities. However, Beijing officials encouraged smaller governments to enforce stricter guidelines on existing taxes on gains from the sales of second homes. Primary residences that have been owned for over five years remain tax exempt, and by divorcing, the couples avoid paying taxes by selling real estate assets as individuals. If a sale has been completed, the couples may remarry if they wish to.
No matter what your reason for divorce may be, do not go through the process without a divorce attorney from San Diego’s Fischer & Van Thiel, LLP, at your side. Contact one of our attorneys today at 858-935-6211.