Hitched and ditched - just for money

Updated: 2013-07-12 08:50

By Xu lin (China Daily)

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For some opportunistic Chinese couples, marriage is far from being a matter of the heart

Some Chinese couples are filing for divorce or getting married to exploit loopholes in the recent housing price control policies. And they are faking it.

In early March, the State Council announced a ruling requiring those who own more than one apartment to pay 20-percent income tax of the capital gains tax if they sell their second property rather than the previous 1 to 2 percent.

Couples who own two properties can avoid the high taxes if they split, with each party owning only one property after the divorce.

This loophole triggered an avalanche of divorce cases. In Shanghai, the divorce line was so long that the civil affairs bureau had to limit the daily number of divorces.

"I can never forget the day when my parents got divorced," says a Beijing resident, who only wants to be known as Huang. "It's such an insult. They love each other but had to do it for my son."

Like many families, they had planned to buy a house in a good school district as Huang's son is about to start primary school. Thanks to the fake divorce, they avoided tax of more than 700,000 yuan ($114,000; 88,600 euros) when they sold one of the two properties - both under his mother's name.

"It's not a clever solution, but it solves our problem," he says. "I've heard of couples who fake a divorce because of the new policy. But when it happened to my own family, I was so disturbed."

Meanwhile, in Beijing, single adults with permanent Beijing residency are not allowed to buy a second apartment. The ruling encouraged some to fake marriages to sidestep the regulation.

It is not the first time that housing policies have affected marriages in the past decade.

Previously, people from cities such as Beijing, Shanghai and Nanjing have been found entering into make-believe divorce or marriage, to qualify for more relocation compensation in the form of new houses, when their old houses are demolished or possessed for development.

In one case in March, a pair of parents and their son and daughter-in-law from Ningbo, Zhejiang province, all got divorced. Later, the father-in-law "married" his daughter-in-law - so the family could get even more compensation.

But their move failed to fool the local public security bureau, which refused to change their household registration.

Ming Li, deputy director of China Marriage and Family Counseling Center, says: "Some couples try to seek advice from us regarding false divorces because of purchase limits and high tax in the housing market, but we always tell them don't do it, as what is supposed to be make-believe may become reality."

It happened to a couple she counseled. The couple, in their 30s, supposedly faked their divorce and the husband stopped going home. When the wife questioned the husband, he denied that the divorce was fabricated. He used it to his advantage to be with his new partner, with whom he had been having an extramarital affair.

"Someone will suffer from the make-believe divorce. For a successful man, there are hordes of women throwing themselves at him. When he's divorced, whether it's fake or not, the situation will be complicated," Ming says.

"Marriage is sacred. You can't just do whatever you want, treating it like a trade."

Chen Yiyun, a marriage researcher at the Chinese Academy of Social Sciences, agrees.

"A fake divorce may turn out to be true. If there are already problems in the marriage, one may seize the opportunity to sneak away."

"The price of housing is always increasing. Some people fake their divorce to qualify for a new house. After all, investing in property is the most stable form of investment. Money in the bank devalues and it's too risky in the stock market." In Chinese culture, owning a house is a paramount issue, she says.

Yang Xiaolin, a partner with Beijing Yuecheng Law Firm, says under the law, property bought before marriage is considered as personal wealth rather than conjugal property.

When a couple remarry, if one does not want to change the property registration, the other can do nothing about it.

"And if one party wants to marry someone else after the fake divorce, the other party cannot stop it by just saying 'It's just a fake divorce',"he says.

He has dealt with a case in which the party who owned the properties refused to remarry his former wife after the fabricated divorce.

"In such cases, one can't seek legal redress," he says.

"We have to publicize such cases so people will not treat marriage as a joke.

"Generally, it is a risk to fake your divorce. It may even affect your children."


(China Daily European Weekly 07/12/2013 page25)