China: Spike in divorces linked to tax loophole

Beijing’s divorce rate has increased by more than 40 percent in the first three quarters of this year from the same period last year. Experts said that might be because couples are seeking to avoid a property tax imposed earlier this year…In March, the nation introduced a nationwide 20 percent individual income tax levied on capital gains by home sellers. Previously, only a 1 percent individual income tax was levied on the sale price. 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. They are then able to remarry.