While working in Shanghai I discovered that the tax system is responsible for 30% of divorces in the city. When the government announced a 20% tax rate on profits from the sale of residential property, they had an exemption that each person or couple could exempt on property as it was their residence.
As soon as the law came into effect divorces went up by a third. When property prices have tripled in Shanghai in the last decade, just before you sell one of the two properties you own as a couple, you get a divorce. A few months later, you register to marry again… And you have saved lots of tax.
Fortunately for me my wife and I don’t own a rental property.
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