Rental Tax for Foreigners - New or just being enforced?

[Brian US]

As I try to find a new apartment in Beijing, I have found that everyone knows about the foreign rental tax, but they don't know how it is actually calculated. It is further confusing since rental agencies have claimed it is applied differently depending on the area of Beijing, with some places not having a tax.

Here is what I have heard from various rental agencies:

1) One-time tax of 50% on monthly rent (4000RMB/mo apartment would be a tax of 2000RMB), this was confirmed by the landlord that is a police officer.

2) One-time tax of 5% on total rent of the lease (4000RMB/mo apartment for 12 months would be a tax of 2400RMB = (4000*12) 5%).

Now the agents have said they can create another lease with a lower rent to give on registration to lower the tax. For example, on the fake lease they write 2000RMB/mo instead of 4000RMB/mo or something along those lines. Of course I would never let them do this since I am a lawful resident in this great country.

I read before on this forum that there was generally a 100RMB tax each month? I have not paid any taxes on the two apartments I have rented over the years that I know of. Also, friends that have rented a few months ago didn’t pay tax or it was never brought up. This leads me to think this is a new “crackdown”, where this tax is finally being enforced.

Another friend mentioned this one-time fee is only for landlords renting out their apartment to foreigners for the first time, so a second foreigner possibly wouldn’t need to pay. The agents I asked didn’t know about this.

Does anyone have further insight or the law on this?

Edit:

This article explains a 5% tax:

http://thebjreviewer...tax-really-goes

Says there is a tax, and if you need to pay it, make sure your landlord goes with you for it and you get a proper receipt. An agent going with you may just pocket it and you won't be properly registered.

My experience:

So I went through our agent to prepare the documents for paying the tax and to register. After I paid the agency fee the day before, the agent then explained there was a “handling fee” of 300-400RMB to help with the tax and registering. After outright refusing to pay, he suddenly “forgot” where the tax office and police station were and so did all of his colleagues in the office. They even ignored our suggestion to Baidu it since there were several agents just sitting at their computers.

After getting him to at least write out the neighborhood it was in, I was lucky enough to find a cabbie that took me to the police station. From there it was about a 200m walk south to the tax office, which is a hole in a wall place inside a residential neighborhood. After handing over the documents the woman in the tax office immediately said the copies weren’t clear enough to process and there was a problem with my landlord not having a 2^nd generation ID card (only a 1^st). Got our landlord on the phone, which we handed over to the tax official where she proceeded to yell at our landlord for sending foreigners to the office without any guidance. The landlord was confused, because the day before the agent said he would go with us, so she made arrangements to meet us back at the office for the next day.

Show up the next day with our landlord dragging the agent in toe. While at the tax office, pretty much only foreigners showed up to pay. One Korean guy had his landlord present an obviously falsified tax form listing the room at 20 something square meters, but the lease put the apartment at 45+ square meters. The landlord immediately said he is only renting a small room that hasn’t been renovated yet. The small office only had room for our two parties with another group of Western guys waiting outside with their Chinese friend/young landlord.

After getting the fapiao, I went over to the police station to register. Posted on the glass in front of the officers was a notice in English stating the need for your landlord to pay the property? tax and that it is needed to register. The law in Chinese was posted next to it, which I believe was put in place in 2007.

The tax was also brought up while looking at apartments near the Llama Temple and a couple other places along line two. I know many people say that it is the landlord’s responsibility to pay the tax, but since this appears to be aimed at foreigners, I doubt they will jump at the chance to pay several thousand RMB more for you over a local.

[Cat Jones]

The only tax I know of is the 5% tax that your landlord should pay, not you. This is tax they are required to pay on their rental inclome. Nearly every landlord will try and avoid paying it.

Normally tennants don't pay any tax unless that is you need a fapiao to claim back rent costs from your employer. At that point unfortunately many foreigners are forced to pay the 5% tax themselves to get the fapiao. Someone needs to pay this tax to get the fapiao.

I would be very suspicious of these agencies you are dealing with. I just signed on a new apartment on Saturday and there was no mention of tax, and no mention of paying the agency a fee (for once)- another area they will try to screw you on.

I've never heard of the 50% one off tax. Are you sure this isn't the agency fee that they are trying to get you to pay half of?

Just because this guy is a policeman doesn't mean he's telling you the truth

[gato]

Seconding Cat above. There is no such thing as a foreigner rent tax. The only tax is a 5% tax on rental income.

[Brian US]

The agency fee is separate. Looking around more online, it does seem to be the magic number of 5% for the tax. I know the landlord should pay for it, but I guess it all depends on the final costs since I did get them to lower the rent and the agency fee. I think I will go ahead and pay it, since my roommate might be able to get it reimbursed through work.

I've been dealing with many different agencies from those that include the fees in the rent, to national chains like 我爱我家. Looked at a lot of places over the last couple weeks and lost a few places over the fee negotiations. It's easy to say that you won't pay a tax or agency fee, but when the landlord outright refuses to pay they can either lower the rent or give you a 'take it or leave it'.

[Brian US]

There is no such thing as a foreign rent tax. The only tax is a 5% tax on rental income.

Oh, good to know it isn't for foreigners, just rental tax, so I do feel a bit cheated. Meeting this afternoon to go over it, but since we were quoted by the 我爱我家 that it would only be around 1200RMB, I don't think it's worth it to lose my current place.

[ChTTay]

Many people I know (students, wudaokou) have had to pay to register in their accommodation. I had to pay. Maybe landlords are "supposed" to pay but it looks like they increasingly don't, at least round here.

It was touched upon here

http://www.chinese-forums.com/index.php?/topic/39945-is-there-a-fee-of-500-kuai-to-pay-to-the-police-to-officialise-the-changed-residence/

In that forum i said i though i had to pay 200. Recently my new room mate had to pay 500. I asked her for the receipt but she said she lost it.

[Brian US]

I'm surprised that all the agencies are bringing it up now, since I never paid it in the last four years of living in Beijing. I would think agencies wouldn't want to scare you off and side with the landlords on this right away? It also seems consistent, since all the big agencies I went to confirmed it was solely for foreigners.

[Cat Jones]

我爱我家 are the absolute worst agency to deal with. They are the only agency that makes the tennant pay the agency fee. I'd avoid using them if you can.

I know it's hard to say no when they say take it or leave it. But there are loads of properties to rent. I wonder if they would change their tune if you said you weren't interested anymore. Walking away is usually the best negotiation tool.

I've never paid a fee to register at the police station either. Who did you have to pay? The landlord?

I don't know where you are looking to rent, but if it's a building complex there are usually agencies based in the actual complex who are much better to deal with than the big ones.

[Cat Jones]

Oh just re-read one of your posts that you lost a couple of places due to fee negotiations. It sucks.

[Brian US]

If you didn't pay the fee, then your landlord paid a fee and I'm sure it was "included" in your rent.

Actually this article sums it up pretty well:

http://thebjreviewer.com/blog/2012/8/28/beware-of-the-agents-where-your-5-rental-tax-really-goes

Says there is a tax, and if you need to pay it, make sure your landlord goes with you for it and you get a proper receipt.

[gato]

In that forum i said i though i had to pay 200. Recently my new room mate had to pay 500. I asked her for the receipt but she said she lost it.

Who did your landlord pay the RMB 200 to?

[TheBJReviewer]

Seems like my article has been posted a few times (TheBJReviewer) so maybe I could shed some light on this. The rental tax is 5% of the monthly rental fee being charged by the landlord. This tax, in theory, must be paid for you to receive your invitation letter from your housing community to then apply for tour temporary form of residence from the police station. Most police stations do not require more than just your passport and your housing lease however they are allowed to request more by law. The Wudaokou police station requests everything they are allowed to and is typically quite strict when it comes to this.

Chinese people are not required to have this invitation letter when they register at the police station if they need to register at the police station (Beijing residents should not have to register however non-Beijing residents should). Because they do not need this paper, they do not really need to pay the tax. Yes, the landlord is supposed to pay this tax because ultimately they are the ones who are receiving the income from the rental. It seems, though, that recently many landlords have just decided that either the foreigner pays it or they can find another place to live. Many landlords will actually have you sign two leases. One lease will be the "real" agreement between the two of you and the other will have a "fake" rent amount for tax purposes. Or, if your tax office's manager has a daughter that goes to university in your hometown, your tax may also decrease substantially. I hope this explains it a bit.

[icebear]

The reason some people don't pay the 5% tax (foreigner or local) is because there is no need for a fapiao. If you need one for you job (which generally means you are getting a income tax reimbursement of greater value) then its easily worth paying for the fapiao.

[tysond]

My experience was having a brief negotiation around the fapiao tax. As I need the fapiao they quickly took this off the negotiation table. Also I found that walking away from a deal did not work out well. This is strange because when I finally signed a place I found a postcard in the mailbox indicating that at least a year had passed since the place had been rented, which was my suspicion on a lot of places I viewed given the dust.

My guess is that many landlords would rather have nobody renting that get a low price.

But I never saw or heard of any foreigner specific taxes. I guess foreigners are more likely to insist on a fapiao as I am not sure it is particularly useful for locals.

Don't think I paid an agent fee, either. But I paid a months deposit. Which I am not sure I will ever see again. Hard enough to get that back in orderly Singapore!

[msittig]

The very first reply in this thread says pretty much everything I have to say on the subject. At contract-signing time the landlord laughed when we mentioned needing the fapiao, and laughs each time we mention off-hand having paid it.

However, I also want to make a counterpoint (from Shanghai) to what TheBJReviewer says above about foreigners only paying the tax in order to register at the police station: I've never been required to present proof of having paid the tax when registering at any police station here in Shanghai in my 9 years of living here. At my current rental apartment, I pay on an as-needed basis -- as in, when I need the fapiao to get my housing reimbursement from work -- to a representative of the paichusuo who makes as-needed appearances in the neighborhood juweihui office for the express purpose of collecting this tax and dropping off fapiao as proof of payment. He will occasionally call around when I haven't paid in a while, and I've seen local Chinese paying the same tax when I've gone in to the juweihui.

That's my experience with the rental tax.

[TheBJReviewer]

In 5 years in Beijing, I've only been required to get an invitation letter from the community/district at my current apartment where I've had to do it 2 years. Here is another post we wrote about registering at your police station and what they are allowed to ask for: Registration Form of Temporary Residence I understand that this is not the case in most places, however, it seems that since last year's foreigner crackdown, Beijing has become more pushy in some areas.

[Brian US]

Quick update, which I'll explain further in the first post later tonight:

I did pay the tax this morning and register. The police station would NOT allow you to register without the fapiao. There were two signs right at window that explained in English the need for it and the law (in Chinese) next to it. I’m sure this depends on the area, because I’ve never paid this before in Haidian district and friends renting around Dongzhimen a few months ago never brought this up. I registered in 太阳宫 for an apartment in 芍药居.

[Cat Jones]

Wow, I've never heard of anyone needing a copy of the fapiao to register at the police station. Well that's another way of forcing foreigners to pay the tax on behalf of the landlord It seems there's no escape.

[msittig]

Wow, so Beijing is pretty strict about this. Did you have to pay the full year's tax all at once?

[icebear]

At my current rental apartment, I pay on an as-needed basis -- as in, when I need the fapiao to get my housing reimbursement from work -- to a representative of the paichusuo who makes as-needed appearances in the neighborhood juweihui office for the express purpose of collecting this tax and dropping off fapiao as proof of payment.

This is how it works in Beijing, unless you're getting taken for a ride...