How to Sell your Properties in China? | Lawyers in China (2024)

How to sell your Chinese property as a foreign owner? What is the specific process for non-Chinese citizens to sell their properties in China? What kind of legal services an attorney can provide in a foreign-related real estate transaction?

How to Sell your Properties in China? | Lawyers in China (1)

Here we will briefly introduce four steps about how a non-Chinese citizen sells his property in China, which are as follows:

Step 1: Signing Engagement Letter

Find interested buyers and appoint an attorney to help you during the sales of your property in China. This step needs you to prepare a power of attorney, and instruct and authorize the attorney to represent you to settle relevant issues in this transaction. The power of attorney shall be notarized by the local notary officeof your nationality and shall be authenticated by the Chinese Embassy in your country.

Step 2: Signing Sales Contract

Enter into Sales Contract and Deposit Agreement with the buyer, after which the buyer shall pay the deposit to you. In this stage, you need to prepare certificate of property and the owner’s ID card. If the owner of the property can not make it to show up, power of attorney will be necessary. Besides, if ownership is shared by couple in marriage, a proof of an agreement reached by both parties of marriage to sell the property need to be provided.

Step 3: Examination and Verification

At this stage, the buyer is required to do an assessment to confirm that he/her has the local qualification to purchase the property, and the seller is required to do a property verification, ensuring the property ownership is clear without any mortgage.

Step 4: Online Registration

Online Registration after signing a formal sale contract of property, which is a compulsory step issued by the real estate management department requirement. After this registration, one property can never be sold for twice, and the risk of “one house, two sales” can be eliminated.

Step 5: Payment

1) If the buyer conducts payment in full. The seller shall set up a Chinese bank account, then the buyer shall transfer money into this seller’s bank account. The bank will temporarily freeze this payment until the process of changing the name of property is completed.

2) If the buyer pays with a loan. The buyer shall apply for a mortgage loan from the bank and transfer the downpayment to a supervision account of the bank. The seller shall ensure that the mentioned application for a mortgage loan has been approved by the bank before changing the name of the property.

Step 6: Paying tax & Changing the name of property

Both the buyer and the seller/your attorney shall go to the local Real Estate Transaction Management Center to change the ownership of the property. During this step, you (as the seller) may need to prepare the Power of Attorney, relevant certificate of notarization or authentication, a certificate of the ownership of your house, your passport or any other certificate of identification for the application of ownership modification. In addition, foreigner owner is also required to pay relevant taxes for selling their real estate in China. More specifically, you need to pay relevant taxes in this transaction, such as sale tax(approximately 5% of total selling price), stamp tax (approximately 0.05% of total selling price), etc.

Step7: Obtaining Real Estate Certificate

If the buyer purchase the property with a loan, a mortgage registration will be required after obtaining Real Estate Certificate, only after which the bank will loan relevant amount of the said mortgage.

Step 8: Property Delivery

The seller shall settle all property expenses (such as property management fees, fees for water and electricity, etc) and provide the keys to the buyer after receiving the loan from the bank.

Legal services provided by a professional attorney in a foreign-related real estate transaction can be divided into the following:

1) Representing foreign sellers (hereinafter the “clients”) to handle and settle the whole procedure of the transaction, including participating in reaching a sale contract with the buyer, reviewing the contract and any other related materials and providing professional advice to clients regarding legal issues during the transaction.

2) Providing Legal Opinion Letter, analyzing relevant legal risks.

3) Dispute Resolution, including settling the dispute arisen from real estate transaction, drafting and sending a Letter of Demand, representing clients to file a litigation or arbitration, etc.

Step-by-Step Process for Selling Property in China as a Foreign Owner:

Step 1: Signing Engagement Letter

Find interested buyers and appoint an attorney.
Prepare a power of attorney notarized by the local notary office of your nationality, authenticated by the Chinese Embassy in your country.

Step 2: Signing Sales Contract

Enter into a Sales Contract and Deposit Agreement with the buyer.
Prepare the certificate of property, owner's ID card, and necessary authorization if the owner can't be present.

Step 3: Examination and Verification

Buyer's assessment of local qualification to purchase.
Seller verifies property ownership without any mortgage.

Step 4: Online Registration

Step 5: Payment

Full payment requires the seller to set up a Chinese bank account for the buyer to transfer funds.
Payment via loan involves the buyer's mortgage approval before changing property ownership.

Step 6: Paying Tax & Changing Property Ownership

Seller and attorney visit the Real Estate Transaction Management Center.
Pay relevant taxes (e.g., sale tax, stamp tax) and modify ownership.

Step 7: Obtaining Real Estate Certificate

For property purchased with a loan, a mortgage registration follows obtaining the Real Estate Certificate.

Step 8: Property Delivery

Seller settles property expenses and provides keys after receiving the loan from the bank.

Legal Services Provided by Attorneys:

Representing Foreign Sellers:
- Handling the transaction procedure.
- Participating in sale contract negotiations.
- Reviewing contracts and offering legal advice.
Providing Legal Opinion Letters:
- Analyzing legal risks associated with the transaction.
Dispute Resolution:
- Settling transaction-related disputes.
- Drafting demand letters or representing clients in litigation or arbitration.

For tailored advice and professional guidance specific to selling property in China as a foreign owner, seeking assistance from reputable legal firms like Landing Law Offices is recommended. They offer comprehensive legal services and expertise in navigating Chinese real estate laws for non-citizens.

Should you need further clarification or personalized legal advice, reaching out to certified lawyers experienced in Chinese property transactions, like those at Landing Law Offices, would be beneficial.