Expats

Buyer's guide to courtyard homes

(China Daily)
Updated: 2010-02-24 11:47

Courtyard buildings are a classical style of residential housing in Beijing. Many of the courtyards in Beijing date from the Ming Dynasty. Buying them as second homes has become a trend among the city's expatriates and domestic elite. A single courtyard house usually has an open space, sometimes with a garden, surrounded by four rooms, each running along one of the building's high walls.

Beijing's traditional courtyard houses are mainly located in the Dongcheng, Xicheng, Chongwen and Xuanwu districts. The prices of these building vary and depend largely on the district. Wealthy businesspeople and politicians own many courtyard houses in Dongcheng and Xicheng District, where an average 300 square meter to 500 square meter place costs between 6 million and 20 million yuan. In Xuanwu and Chongwen, courtyard houses are smaller, usually 200 square meters to 300 square meters, and prices are correspondingly lower, ranging from 4 million yuan to 8 million yuan.

Do your research

Because the cost and potential risks associated with buying a courtyard house are relatively high, experts suggest potential buyers do some research, particularly on property rights involved in the deal.

It's also important to thoroughly inspect the house and neighborhood, trying to get a sense of whether or not the surrounding environment is comfortable and what transportation options exist. Buyers will have different requirements, but all should be aware that many courtyard houses lack basic municipal services taken for granted in other areas of the city. Courtyard houses often don't have sewage pipes or natural gas pipes. If you want to rebuild related facilities after the purchase, you need to go through the municipal planning department for approval.

Potential buyers should have the property card and proof of original ownership verified. The ownership of courtyard house in Beijing can be complicated. Many courtyards are state-owned or belong to institutions. Buyers need make sure they are dealing with the real owner of the house and need to find out whether the owner has the right to sell the property. It's also prudent to find out if there are debt disputes (including the mortgage) that come with the courtyard house.

Fees

The sale process of courtyard houses includes a variety of taxes and fees. These include a stamp duty (usually 0.05 percent of the transfer price) paid by the buyer and seller, respectively, a contract tax (often 3 percent of the transfer price) paid by the buyer, a mapping fee paid by the buyer and an evaluation fee paid by the buyer.

Transaction procedures

Different districts in Beijing have different formalities for transferring property rights. But all buyers need several documents for the process, including an official report on the courtyard house (required by the Beijing Housing Administration Bureau). Foreign individuals or companies, and those from Hong Kong, Macao and Taiwan, need to get safety approval from the relevant foreign affairs department.

Renovation

Buyers often want to demolish and rebuild courtyard houses after purchase. Before they can do this they need to obtain approval from the local planning department. Courtyard houses located in historical and cultural protection zone might come with municipal government requirements on height and appearance after renovation. Some heritage buildings are strictly protected and can't be changed and reconstructed.

Potential buyers are advised to use a reputable intermediary company to investigate all possible issues and risks involved when considering buying a courtyard house.

METRO