How to manage real estate, social security, and housing provident fund domestically in China?
Hilda B.A.
Hilda B.A.
Business owner focusing on New Zealand investment. | 专注于新西兰投资的企业主。
Hello friend! Getting ready to embark on your journey to New Zealand to start a new life, congratulations! Before you go, you really need to sort things out with your "assets" back in China. Many friends I know have gone through this stage, so I’ve laid it down clearly for you based on their experience, using plain language. Hope this helps!
---
### I. What to do with your property in China?
Property is the most significant asset for us Chinese and requires the most careful handling. Basically, there are three options: sell, rent out, or leave it vacant. There's no one-size-fits-all best choice; it entirely depends on your personal situation and future plans.
**1. Sell: Secure the cash, launch your new life**
* **Who is this for?**
* Those who urgently need a lump sum to buy property, start a business, or cover living expenses in New Zealand and don’t want to juggle things in two places.
* Those who aren’t optimistic about the future outlook of the Chinese property market and want to cash out promptly.
* **Advantages:**
* Get a large amount of cash flow all at once, helping you establish yourself in New Zealand and giving you more options.
* Avoids the hassles of remote management, like finding tenants, handling maintenance, and dealing with neighborly relations.
* **Disadvantages and things to note:**
* **Selling timeline:** Selling second-hand property in the current Chinese market isn’t that easy. It might take time and patience.
* **Taxes:** Understand the taxes due when selling, such as personal income tax, value-added tax, etc. (Reductions exist based on specific circumstances like ‘five-year exclusive ownership’).
* **Getting funds offshore:** This is a major issue. China has foreign exchange controls, with a yearly limit of USD 50,000 per person for conversion. Trying to move hundreds of thousands or millions from a property sale to New Zealand in one go isn’t easy. Plan ahead by using family members to convert and transfer funds in batches (ensure it's legal and compliant), or ask banks about dedicated asset transfer programs for emigrants.
**2. Rent Out: Keep a foothold and earn passive income**
* **Who is this for?**
* Those who are financially comfortable, want to retain domestic property as an investment, or leave a fallback option.
* Those whose property is in a prime location, easy to rent, and offers a decent rental yield.
* **Advantages:**
* The asset is retained and can continue to appreciate.
* Generates a monthly RMB cash flow to cover expenses in China (e.g., allowances for parents) or save up to hedge against exchange rate risks.
* You’ll have a place to come back to if you ever return.
* **Disadvantages and things to note:**
* **Remote management:** This is the biggest pain point. What if your property leaks or the tenant stops paying rent while you're in New Zealand? So, you absolutely need a super reliable relative, friend, or professional property management company in China to handle things. Management companies charge a service fee.
* **Rental income:** This income is taxable in China. Also, converting and moving this RMB rental income into NZD to bring to New Zealand requires some thought.
**3. Leave Vacant: Short-term solution or emotional hold**
* **Who is this for?**
* The wealthy, unfazed by the cost.
* Those going to New Zealand for short-term work or study (1-2 years) with plans to return soon.
* Those with deep emotional attachment to the property, simply unable to let go.
* **Advantages:**
* Hassle-free, no dealing with tenants.
* Available to move back into anytime.
* **Disadvantages and things to note:**
* **Pure cost:** An empty property still incurs property management fees and heating fees (in the north). You get no returns during this period; it’s pure money down the drain.
* **Property deterioration:** Properties sitting empty long-term can develop various minor issues.
> **Summary for property:** If money is tight or you fear hassle, **sell**. If finances are stable and you feel positive about China's prospects, rent it out with a **reliable handler or agent**. If only abroad for a few years short-term, **leave it for now**.
---
### II. Social Security: The Persistent Headache
Social security (社保, *Shèbǎo*) is complicated. Many folks’ first instinct is, "Can I just cash it out and get the money back?" My advice: **NEVER hastily "cancel" your coverage!**
*Shèbǎo* mainly consists of two parts: **Pension Insurance** (养老保险) and **Medical Insurance** (医疗保险).
**Pension Insurance**
* **Core Rule:** In China, if you’ve made contributions for at least 15 years *cumulatively* and reached the legal retirement age, you qualify for a monthly pension.
* **Your choices:**
* **Already contributed 15+ years:** Congrats! You’ve secured eligibility for a pension. After reaching retirement age, even with a New Zealand passport, you can collect a monthly government pension by completing necessary procedures (like providing a "Certificate of Being Alive"). It might not be a huge sum, but it's a stable income denominated in RMB – quite valuable.
* **Contributed less than 15 years (e.g., 8-9 years):** Leave it alone! Your personal account and contribution history will be preserved. You can choose to "pause contributions." If you return to work in China later, you can resume contributions. Even if you don't return, this account won’t expire.
* **About "canceling coverage" (退保):** You can only cash out your pension contributions if you renounce Chinese citizenship after emigrating. But even then, you can only recoup the money in your **personal account** (the portion you personally paid in). You CANNOT get back the much larger portion paid by your employer! That’s a massive loss. So, unless you desperately need that small amount of cash, I strongly advise against cancellation.
**Medical Insurance**
* Similar to pensions: the longer the contribution history, the better your post-retirement healthcare benefits.
* **A practical tip:** Your medical insurance card’s personal account likely has a balance. Before you leave China permanently, go to designated pharmacies and use up the balance. Buy common medications or supplements to take with you or for family to use. Don’t let that money go to waste!
> **Summary for Social Security:** Simply put, *Shèbǎo* is a long-term contract between you and the state. Unless you’re absolutely certain you’ll sever all ties with China AND urgently need the cash, the best approach is to **"seal/suspend"** it and let it quietly stay put. It’s a really valuable safety net.
---
### III. Housing Fund: Your Portable "Little Nest Egg"
The Housing Fund (公积金, *Gōngjījīn*) is different from *Shèbǎo*. It’s more like a mandatory savings account. The good news is: for **settling abroad permanently, you can withdraw your *Gōngjījīn* IN A LUMP SUM!** You can take both the principal and interest, including both your contributions and your employer's contributions.
* **How to withdraw?**
1. **Prepare Documents:** Typically requires your passport, New Zealand visa/proof of permanent residency, ID card, *hukou* (household registration booklet, if canceling registration), proof of termination of employment from your employer, linked bank card for the fund, etc.
2. **Visit the Fund Management Center:** Apply at the Public Housing Fund Management Center where your account is held.
3. **Fill out Closure Forms:** Complete the "Housing Fund Account Closure and Withdrawal Application Form."
4. **Wait for Transfer:** Once approved, the funds will be transferred directly to your designated bank account.
* **Important Reminder:**
* **Do this BEFORE leaving China if possible** and attend in person if you can. Authorizing someone else to handle this after you leave involves much more cumbersome procedures.
* Call your local Housing Fund center's hotline (Area code + 12329) beforehand to confirm the exact required documents to avoid wasted trips.
---
### In summary, here's some plain advice for you
1. **Don't rush the decisions:** Preparing for migration is overwhelming; it’s easy to make impulsive choices. Apart from the Housing Fund (which you can handle right away), if you’re unsure about the property and social security, put those aside for now. Revisit them once you're settled in New Zealand.
2. **Prioritize and tackle them one by one:**
* **Simplest:** *Gōngjījīn* (Housing Fund). Clear policy, withdrawable. Settle before leaving.
* **Most Significant:** Property. Highest value, most mentally consuming. Requires careful thought based on finances and family plans.
* **Longest-term:** *Shèbǎo* (Social Security). Don't just look at now; look at retirement. Likely, "doing nothing IS the best option."
3. **Consult professionals when in doubt:** For property sales – talk to reliable real estate agents. For financial planning – ask experts at banks. Online experiences are good references, but ultimately base decisions on your own specific circumstances.
Hope this helps you out! Wishing you all the best settling into your new life in New Zealand!