China bans citizens from buying third home

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Beijing, April 30 – China Friday banned its citizens from buying ‘more than one secondary home’ in an effort to curb soaring property prices.

The government also ordered the implementation of policies that would ban mortgages for purchasing a third or more home, Xinhua reported.

The government had in April raised the down-payment requirement on second-home mortgages to 50 percent, up from the earlier 40 percent, and reiterated that buyers must pay an extra 10 percent on interest rates for these homes.

A notice issued by State Council asked banks to stop loans to buyers who have not paid personal income tax or into the social security fund in the past 12 months.

It allowed local governments to cap the number of homes a buyer can own.

The People’s Bank of China, the country’s central bank, has said it would strictly implement the State Council policies to rein in rapidly climbing property prices.

The government had announced a series of steps to make it more expensive for people to take out mortgages on investment properties, including raising mortgage rates and down payment requirements, Xinhuanet reported.

The move came after authorities said China’s property prices in 70 major cities rose 11.7 percent in March 2010 compared to the same period last year.

Chinese Premier Wen Jiabao had pledged in February that the government would step up efforts this year to rein in soaring property prices and manage inflation expectations.

IANS