Wed, March 09, 2011
Business > Industries

Firms use loophole to evade home ban

2011-03-09 13:57:17 GMT2011-03-09 21:57:17(Beijing Time)  China Daily

Real estate agents are exploiting a loophole to dodge tough new measures that ban non-Beijing residents from buying homes in the capital.

A China Daily METRO investigation found that a number of businesses now offer to provide clients with false records to escape new rules aimed at cooling the overheated property market.

Among the 15 regulations introduced by authorities on Feb 16 is one that bars residents without Beijing hukou (permanent residency) from purchasing homes unless they have paid social security and income tax in the capital for five consecutive years.

However, for a fee, real estate agencies are promising to help clients use a back door to dupe the auditors.

A receptionist at the Daxing sales office of property firm ChinaCAAC Co Ltd told METRO reporters posing as potential customers that the social security restriction could be avoided.

"If you're determined to buy a house from us, we can help you with a solution (to the policy obstacle)," she said, before explaining that her company can assist potential buyers in paying social security "arrears", or back payments, in order to make them eligible, regardless of whether they have lived in Beijing for five years.

"It will cost about 30,000 yuan or 40,000 yuan to pay social security in arrears for three years," she said, adding that clients simply need to provide their identity cards, hukou registration booklets, temporary residence permits and social security numbers.

At Haojiahaofeng real estate company in Chaoyang district, one agent went into more detail about how the process works. He told reporters his firm can contact an "insurance" agency that will fabricate an employment contract with either a real or fake company. That document, he said, would show authorities that social security payments had been made for however many years required.

"It's not as easy to get the tax permit. It's much easier to get the social security," he said.

The insurance company charges 20,000 yuan in addition to 9,000 yuan for every year's worth of forged social security documents.

The total bill for five years of proof would be about 65,000 yuan.

Wang Qiang at the Beijing Municipal Commission of Housing and Urban-Rural Development said he has heard about this service being offered on the sly, but insisted that without authentic documents it is not possible to get around the measures.

"It can't happen because these people have not lived in Beijing for five years. They don't have the proper social security or income tax documents, so they can't get the (housing documents)," he said.

Attorney Li Hongpeng, who is a partner at the B&D Law Firm in Beijing, said in most cases paying social security or income tax "arrears" is legal, although he is concerned many insurance companies may be doing it "in the black", or illegally.

"If it doesn't violate the regulations or the law, it's OK to pay social security and income tax in arrears," he added.

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