Recently, many foreign clients have approached us with inquiries. They have relatives who have passed away and left them and other inheritors with a house in China. Consequently, they seek guidance on the legal procedures to legitimately inherit and sell these properties in China.

In such cases, due to real estate disputes falling under exclusive jurisdiction, if disputes arise, the cases should be specially handled by the courts where the Chinese properties are situated. So, what fees are incurred in lawsuits and property transfers? This article will provide a brief overview using a property valued at 500,000 RMB as an example.
 
I. Litigation Expenses

If there are no disputes among several inheritors, the inheritance matters are straightforward, and all parties are in China, the property can be inherited through notarization and on-site transfer at the Real Estate Registration Center.

However, if any of the above conditions are not met, the inheritors can only inherit the property by suing in Chinese courts. In such cases, they would need to pay court acceptance fees, preservation fees (not mandatory), and insurance fees (not mandatory).

1. Court acceptance fees: Refers to the cost incurred when the court accepts the case.
2. Preservation fees: If there are disputes between the plaintiff and other inheritors, and the plaintiff wishes the court to first seal the disputed property to prevent other inheritors from auctioning it during the litigation, they can choose to apply for property preservation, but this incurs a preservation fee.
3. Insurance fees refer to litigation property preservation liability insurance. It covers instances where the insured initiates a litigation property preservation application to the court during the insurance period. If the insured’s litigation property preservation results in losses for the defendant after the court’s judgment takes effect, the insured bears the economic compensation responsibility, and the insurer compensates as per the insurance contract.

The aforementioned fees are calculated based on the value of the property in question. For a property valued at 500,000 RMB, the acceptance fees and preservation fees for inheritance cases amount to 8,800 RMB and 3,020 RMB, respectively. The average rate of insurance fees is generally around one-thousandth, approximately 500 RMB.
 
II. Stamp Duty

While China has eighteen tax categories, not all taxes are involved in the process of inheriting and transferring properties. Due to tax reforms and other reasons, other taxes and fees that used to be incurred during property transfers, such as deed tax, are no longer required.

Currently, the only tax to be paid during property transfer registration is stamp duty, which is levied on actions involving the signing or receiving of legally binding certificates in economic interactions.

In the property transfer process, two instances of stamp duty arise: contract stamp duty and immovable property registration certificate stamp duty. The contract stamp duty amount is 0.05% of the property valuation, for instance, 250 RMB for a property valued at 500,000 RMB. The stamp duty for obtaining the immovable property registration certificate amounts to 5 RMB.

III. Other Expenses

Apart from litigation and tax fees, there are other significant expenses in the process of inheriting and transferring foreign-related properties, and their amounts should not be underestimated.

1. Real estate valuation assessment fees: For properties with an area less than 100 square meters, the real estate valuation assessment fee is 5‰ of the property valuation. Hence, for a property valued at 500,000 RMB, the fee amounts to 2,500 RMB.
2. Registration fees: The legal act in the property transfer process is the transfer registration, which incurs a handling fee of 100 RMB.

The above items constitute all potential costs that may arise in inheritance lawsuits. Should you have any inquiries, please feel free to contact us at any time.
 
Contact Lawyer Abby, to swiftly resolve your inheritance issues in China.