A Divorce of Convenience
March 11, 2013 - 11:23 am
Perfectly happy couples are going to Splitsville to take advantage of a new law designed to cool off China’s housing bubble:
Divorce filings have surged like crazy in China over the past week, according to multiple reports. The reason? A new tax on property sales, which seems to have a loophole that lets people get around the tax if they separate from a spouse.
We first mentioned the surge on Wednesday, citing a report in Shanghai Daily.
Yesterday the NYT’s David Barboza followed up.
There are two big stories intertwined here.
The first is that China is trying to curb its well-known property boom. There’s a widespread belief that many markets in China are in bubble territory, and that a collapse or even a stall would be a catastrophe.
What’s interesting about the divorce story is the cat-and-mouse game that’s played between Chinese regulators and Chinese citizens/savers/investors who search out aggressive investment returns in the nooks and crannies of the law.
Tom Friedman will soon propose that China’s super-efficient government enact a law against unintended consequences.
(Hat tip to Debbie M., who finds all the good stuff.)