property in Shanghai
Shanshan0312 /
Updated 12 months ago

Shanghai has continually appeared close to the top of the list of cities with the most expensive real estate in the world. It also remains the most expensive city in mainland China (followed closely by Shenzhen) and the one most popular with expats.

Buying property as an expat

It is legally possible to buy property in Shanghai as an expat. However, in addition to having a hefty sum in the bank, you will need to fulfil several other conditions.

The most important of these conditions is that you will need to have resided in the country legally for at least a year. This will typically involve providing proof that you have been working or doing business in Shanghai.

You will also be asked to provide tax receipts for most of the duration of your stay ' the exact period differs depending on which region you plan to buy property in. For Shanghai, you will need to provide copies of your Chinese tax receipts for the last 12 months out of the past 24 months of your legal stay in the country.

Another condition is that you will need to use the property for residential purposes only ' you are not permitted to rent it out or keep it as an investment. Note that the right to buy refers only to residential property and you won't be able to purchase commercial property unless you own a company in China.

The most important legal aspect of buying residential property in China is that, technically, you will actually be leasing the land that the building stands on for a period of 70 years. Theoretically, upon the expiry of this period, the lease should be renewed ' but the Chinese

Ministry of Housing and Construction retains the right to void your lease and pay you compensation (which can significantly lower than the said property's market value).

How to buy property in Shanghai

When going about your house hunting, it is generally advised to do quite a bit of research as the real estate market in China is very different from that of most Western countries. Most people would start by contacting a real estate agency and consulting an agent about the properties in your price range as well as the process of purchasing them. It is also advised that you contact an international real estate agency (as opposed to a local one) ' as global real estate agencies are generally more knowledgeable about the specifics of buying property in the city as a foreigner ' as well as the legal aspects involved.

Generally, however, you will need to go through the following steps.

First, you will need to specify the characteristics of the apartment or house you are looking for and pass them on to your real estate agent.

Second, you will need to obtain proof that you have resided in China legally for over a year from the local Municipal Bureau of Public Security.

Once you have found the suitable property, you will need to sign a preliminary agreement that includes all the terms and conditions on the deal ' at this point, you will also need to pay 1% of the agreed upon selling price.

You will then go on to draft and finalise the official sales contract, which will need to be notarised.

Finally, you will need to pay a visit to your local Foreign Affairs office and have the purchase approved by the government.


As it has already been mentioned above, Shanghai is China's most expensive city when it comes to real estate. A place in Shanghai's central areas would go for 103,000 RMB per square meter on average and will get down to 48,000 RMB as you move into the outskirts of the city.

Taking out a loan at the bank to buy property in China is quite complicated ' and it's an option rarely used by expats. Most real estate transactions in China are conducted in cash (without the use of mortgages), and this speeds up the development of the real estate market even further.

Though very uncommon, taking out a mortgage is not entirely impossible. Note, however, that you will need to be able to make a downpayment of 30% to qualify for a bank loan and there will be quite a bit of paperwork to go through. Your success in being approved for a loan will primarily depend on your financial standing as well as other specifics of your situation in China.

Useful links:

Century 21 Global Real Estate Agency, Shanghai
Property Law of the People's Republic of China

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