Note: New immigrants in Singapore often ask: “I have lived in Singapore for years and become a Singapore citizen. If a relative in China dies, can I inherit the relative’s property in China, and how do I complete the inheritance procedures?”
Our team recently assisted a Singapore citizen with inheriting real estate in China. This article uses a question-and-answer format to explain the legal basis, procedures, taxes and document requirements applicable when a foreign national inherits real estate in China.
01 Can a foreign national inherit real estate in China?
Yes. Chinese law does not prohibit a foreign national from inheriting real estate in China. China has many types of housing, including military housing, economically affordable housing, two-limit housing and centrally administered housing. Unless a law expressly prohibits inheritance by a foreign national, and provided that the property was lawfully owned by the deceased with clear title, a foreign national may inherit it and complete the registration transfer in the same way as a Chinese national.
02 What is the legal basis for inheriting real estate in China?
Article 36 of the Civil Code of the People’s Republic of China provides that succession is governed by the law of the deceased’s domicile at death; however, succession involving immovable property is governed by the law of the place where the immovable property is located.
Accordingly, a foreign national’s inheritance of real estate in China is governed by Chinese law.
03 How does a foreign national inherit real estate in China?
Under the applicable conflict-of-laws principles of the Civil Code and practical guidance such as the former notice on confirming the validity of notarized documents of overseas Chinese, compatriots from Hong Kong, Macao and Taiwan, and foreign nationals, notarized inheritance is generally handled as follows:
- An overseas Chinese or foreign national applying to inherit real estate in China must apply to a notarial authority in the country of residence for a notarial certificate proving the applicant’s occupation, address and family relationship with the deceased who left property in China. The certificate must also be authenticated by the Chinese embassy or consulate in that country, unless the relevant countries are exempt from authentication under a consular treaty. Where a document is notarized in a country that has no diplomatic relations with China, it generally must be authenticated by that country’s foreign ministry and by the embassy or consulate in that country of a third country having diplomatic relations with both countries.
- The applicant submits the authenticated notarial certificate, the deceased’s death certificate and the will, if any, to the notarial authority in the place where the property is located. After reviewing the documents, the notary will issue an inheritance-rights certificate if the requirements of Chinese law are met. The applicant then uses that certificate to complete the inheritance procedures with the local real-estate administration. If the applicant cannot travel to China, another person may be appointed to act on the applicant’s behalf. The power of attorney must state the agent’s name, address and authority, and must be signed and authenticated in accordance with the applicable requirements.
- If a dispute arises over the inheritance of real estate in China, an overseas Chinese or foreign national may bring proceedings before the people’s court at the location of the property. The court will decide the matter under the law of the property’s location—Chinese law.
For these purposes, “foreign-related persons” include overseas Chinese, persons from Hong Kong, Macao and Taiwan, foreign nationals of Chinese descent and other foreign nationals.
Although the notice referred to above was issued some time ago, it has not been formally repealed and remains a practical reference for notaries and real-estate authorities in many locations.
04 How are overseas Chinese, foreign nationals of Chinese descent and other foreign nationals distinguished?
Overseas Chinese: A Chinese citizen who has settled abroad.
(1) “Settled” generally means that the Chinese citizen has obtained long-term or permanent residence in the country of residence and has lived there continuously for two years, with an accumulated stay of at least 18 months during that period.
(2) A Chinese citizen who has not obtained long-term or permanent residence but has held lawful residence for five consecutive years or more and has stayed in the country for at least 30 months during those five years may also be treated as an overseas Chinese.
(3) A Chinese citizen studying abroad, whether under a public or private program, or working abroad on official business, including as an overseas labor worker, is not treated as an overseas Chinese during that period.
Foreign national of Chinese descent: A former Chinese citizen who has acquired a foreign nationality, that person’s foreign-national descendants, and descendants of Chinese citizens who hold a foreign nationality.
Foreign national: Under the Nationality Law of the People’s Republic of China, a person who does not hold Chinese nationality.
05 What if there are multiple heirs?
Where there are multiple heirs, the first question is whether they disagree about the inheritance or distribution of the estate.
(1) If all heirs agree, they may take the deceased’s identity documents, death certificate, proof of family relationships and title documents for the estate, together with any other materials required by the relevant notary, to the notarial authority where the estate is located. After the inheritance-rights notarization is issued, the applicant may handle the inheritance and registration transfer with the relevant estate administrator, such as a real-estate bureau or bank.
(2) If the heirs disagree about the estate, the dispute must be brought before a court with jurisdiction. The court will issue a judgment or mediation statement on distribution, which the heirs can use to complete the relevant inheritance procedures with the estate administrator.
06 How can an heir waive an inheritance of real estate in China?
If a foreign national decides to waive the inheritance, the person may have a Statement of Waiver of Inheritance notarized in Singapore. The waiver must be expressed clearly. It is advisable to confirm the required format and notarization requirements with the appointed Chinese lawyer before signing.
07 How are powers of attorney and statements notarized and authenticated in Singapore?
The notarial certificate referred to above, powers of attorney and Statements of Waiver of Inheritance are Singapore non-official documents. They should first be notarized by a Singapore Notary Public and then submitted to the Singapore Academy of Law for Apostille authentication.
Because a Singapore notary does not assume responsibility for the substantive content of a statement or power of attorney, and requirements vary among Chinese authorities, applicants should consult the notary, real-estate registration center or Chinese lawyer in the location of the property before notarization.
08 What taxes and fees apply to inheriting real estate in China?
In general, the costs may include inheritance-rights notarization fees, property valuation fees, stamp duty and deed tax on the transfer, and registration fees.
Inheritance-rights notarization fee: generally charged at 2% of the appraised value of the inherited real estate, subject to a minimum of RMB 200.
Real-estate valuation fee: calculated on a progressive basis according to the value of the property.
Transfer taxes and fees: generally include stamp duty at 0.05% of the appraised value, a RMB 100 registration fee and a RMB 5 title-certificate stamp duty.
Deed tax: statutory heirs are exempt from deed tax when inheriting real estate. A non-statutory heir who acquires land or housing under a will generally pays deed tax at 1.5%.
China currently has no inheritance tax. The main costs are the inheritance notarization fee, valuation fee and taxes and fees at the property-transfer stage. Standards vary by city, so applicants should confirm the applicable requirements with the local tax and real-estate registration authorities.
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This article is general information and not legal advice. Specific matters require assessment by appropriately qualified professionals.