Shanghai relaxes purchase, lending to boost property sector

SHANGHAI -- Shanghai on Monday rolled out a series of measures to further stimulate the property sector, including the removal of purchase restrictions on suburban homes.

The measures will go into effect on Tuesday, according to a circular published by six local departments, including the Shanghai housing and urban-rural development commission.

According to the statement, there will be no limits on the number of homes purchased outside the outer ring road for families with local household registration, as well as those without local household registration but with at least one year of social insurance or individual income tax payment records in the city.

Adult single individuals will enjoy the same treatment as those families.

The circular also stated that homebuyers will receive stronger housing provident fund support.

Those who buy new green housing will be eligible for up to 15 percent more housing provident fund loans. For first home purchases, the ceiling is raised to 1.84 million yuan (about $258,600). However, for families with multiple children, the limit is increased to 2.16 million yuan.

Homebuyers can even withdraw their own and even their spouse's housing provident fund for the down payment on new pre-sale commercial housing.

Also, banks will not differentiate between first and second home purchases, further reducing the interest payment burden on homebuyers, as second home purchases often incur higher mortgage rates.

Families without local household registration will be temporarily exempt from property tax on their first home purchase. For the second and more home purchases, members of these families will each get 60 square meters exempt from property tax.