Faking divorce to buy a home in Shanghai

New government restrictions on buying property in Shanghai aren’t even a month old, but people are already finding ways to skirt the law.

The latest tactic: fake divorce.

The most recent effort by the Shanghai government to cool the Shanghai property market, which came into effect October 7, was to limit loans to families buying additional homes and limit those in the market to buying one additional new home.

Since the restriction is by family, Xinhua reports that some couples are turning in forged divorce papers in order to buy more apartments, allowing them to have a total of four homes instead of just two.

The Shanghai Morning Post reports that it called five fake certificate companies, and all reported that the number of clients coming for fake divorce certificates has been on the rise since October 7.

The companies said that the certificates cost around RMB 300 each. An actual divorce costs approximately RMB 11. 

"It was the bank staff who recommended I fake a divorce when I planned to buy an apartment in May, as it was my third apartment, for which I had to pay a bigger down payment and it would be hard to get a loan," said a Shanghai-based purchaser to China Daily. (If you’re wondering, the plan paid off. Wang was able to get the loan at a lower interest rate.)

In response to media reports of the increase in forged divorce certificates, the city municipal civil affairs bureau said anti-counterfeit measures would be increased.

Forging divorce documents is far from a new tactic in Shanghai. The trick has been used for years by people being relocated due to urban development to get larger payouts, but this is one of the first times the practice has reached Shanghai's growing middle and upper classes.