China tightens rules on "second home" ownership | business | Hindustan Times
Today in New Delhi, India
Sep 20, 2017-Wednesday
-°C
New Delhi
  • Humidity
    -
  • Wind
    -

China tightens rules on "second home" ownership

China will adopt a stricter standard in identifying whether a house is a "second home" when approving mortgage loans, a senior banking regulator said in remarks published today.

business Updated: Apr 22, 2010 10:46 IST

China will adopt a stricter standard in identifying whether a house is a "second home" when approving mortgage loans, a senior banking regulator said in remarks published on Thursday.

The government will consult the housing registry to determine whether a family already owns a home, Yang Jiacai, a China Banking Regulatory Commission director, was quoted as saying by the official Shanghai Securities News.

Previously, regulators only looked at whether a family had an outstanding mortgage.

China has ordered that buyers of second homes pay higher down-payments than those purchasing first homes, and several banks are also charging higher rates on second-home mortgages as the government tries to crack down on property speculation.

But some bank executives said the new definition of second homes might be difficult to apply in practice because the national housing registry is fragmented, frustrating banks' efforts to determine whether a family already owns a home.

Separately, some banks in Beijing raised down-payments on mortgages for third homes to 60 per cent and have started charging mortgage rates with a 15 to 20 per cent premium over the benchmark interest rate, the 21st Century Business Herald reported.