It’s another instance of boy meets girl, boy and girl get married, and then boy and girl get divorced because of perverse incentives from Chinese tax laws. After instituting a new property tax that negatively impacts married couples, the Beijing Civil Affairs Bureau has seen divorces leap more than 40% compared to last year’s rates.
The stupidity of the law itself is only matched by the stupidity of its loopholes. The law states that a couple attempting to sell their second home will face a 20% capital gains tax but, if they get divorced and transfer the property to one (former) spouse, it can be sold virtually tax-free and the couple can then remarry. Even the China Daily realizes that this bullshit is getting out of control, and reports:
“The rapid growth of the divorce rate in Beijing has something to do with the new property purchase regulations by the government as some people make use of the loophole to avoid the high tax,” said Li Ziwei, an marriage expert and vice-president of the Beijing Marriage and Family Construction Association.
Li said the divorce rate clearly soared in the month after the regulation was released in March, adding “this phenomenon not only happens in Beijing, but couples in other first-tier cities, where (property) prices have rocketed in recent years, also use this method to avoid taxes. They can save tens of thousands of dollars”.
Li added that the marriage registration department, where divorce applications are also processed, has no responsibility and cannot interfere in the freedom of marriage. Staff in the department would also not know a couples’ real purpose for divorcing.
“Even if a couple decides to get a divorce to evade taxes, they say they fell out of love and their personalities are not suitable for each other,” Li said.
There have been some 39,075 divorces in Beijing this year and, although the numbers aren’t available, presumably a much higher-than-expected rate of husbands and wives miraculously reuniting, brought together by their rediscovered love and “tens of thousands of dollars.”
[Image via Flickr]