Beijing's "828 New Policy" Detailed Rules Effective: Single Building Topping Out for Pre-Sales, Maximum 1% Home Purchase Deposit

Beijing has become the first city in China to roll out and implement the detailed rules of the "828 New Policy".

After the release of the "828 New Policy" for the property market, the rules of "pre-sale upon structural topping out, priority to existing home sales" have drawn widespread attention. Meanwhile, the implementation provisions of local detailed rules determine the land acquisition and development strategies of real estate enterprises in different cities across the country. Therefore, since the introduction of the 828 New Policy, the market has been waiting for the local version of detailed rules that are closely related to the fate of enterprises and the trend of the market.

On September 24, Beijing took the lead in releasing the implementation detailed rules. Four departments including Beijing Municipal Commission of Housing and Urban-Rural Development, Beijing Municipal Planning and Natural Resources Commission, Beijing Regulatory Bureau of the National Administration of Financial Regulation, and Beijing Housing Fund Management Center jointly issued the "Implementation Opinions on Issuing and Implementing the "Notice on Improving the Commercial Housing Sales System" in the Municipality", making Beijing the first city in China to officially release the supporting implementation policy.

In the detailed implementation rules, Beijing clarified the core orientation of "pre-sale upon structural topping out, priority to existing home sales", and strengthened the protection of homebuyers' rights and interests in aspects such as pre-sale fund supervision and the regulation that the deposit collected shall not exceed 1% of the total house price.

Before the 828 New Policy, new residential projects could be opened for sale as soon as they obtained the pre-sale permit. However, in accordance with the provisions of the new policy, new projects can only launch pre-sales after the main structure of the building is topped out. As a result, the source of sales funds for new projects during the construction period is cut off, which exerts great pressure on the payment collection and cash flow of real estate enterprises.

In response to the market's concerns, the Beijing detailed rules have targeted lowered the thresholds for land acquisition and sales in the following aspects:

1. For projects applying for pre-sale, the main structure shall be topped out (the concrete pouring of the building roof slab, roof structures and supporting facilities shall be completed), and the project construction unit, survey, design, construction, supervision and other units shall issue the signed and sealed "Acceptance Record of Main Structure Sub-project". Meanwhile, individual buildings can apply for pre-sale separately.

2. Increase support for development loans. We will increase the support for development loans for existing home sales projects and the "high-quality housing" projects that are safe, comfortable, green and smart. Lending banks shall reasonably determine the disbursement nodes and amounts according to the construction progress of the project, and disburse development loans in batches.

3. For commercial residential land with transfer announcements released after August 28, the transfer price can be paid in installments in accordance with national regulations. The down payment shall be paid within 30 natural days from the date of signing the transfer contract, with the proportion of no less than 50% of the total price, and the remaining balance can be paid off within two years after the signing of the transfer contract, without accruing interest.

Previously, the regulation in Beijing on the full payment of land transfer fees was that the total land price shall be paid off within 2 months (60 days) from the date of signing the transfer contract. The detailed implementation rules of the new policy directly extend the period to 2 years, which greatly lowers the land acquisition threshold for enterprises. And no interest is accrued during the installment payment period.

While avoiding a "one-size-fits-all" approach, allowing new projects to choose either pre-sale or existing home sales, the Beijing detailed rules also emphasize increasing the support for development loans, so as to reduce the capital turnover pressure on real estate enterprises brought by the implementation of the new policy from two aspects: loan requirements and matching the project construction cycle.

In terms of pre-sale fund supervision, the Beijing implementation detailed rules also make refinements, adding a new "key supervision amount" setting: under the condition of strengthening pre-sale fund supervision, after filing with the municipal competent department, pre-sale can still be applied for in accordance with the original pre-sale conditions before the end of 2027, but the fund supervision shall be implemented in accordance with the following requirements: 1. Set the key supervision amount, which shall cover all remaining project construction costs and the municipal engineering costs outside the red line that shall be borne by the real estate development enterprise, so as to ensure the completion and acceptance of the project and the delivery and use conditions of supporting facilities such as water, electricity, gas and heating. 2. All pre-sale funds shall be deposited into the supervision account of Beijing Housing Fund Management Center. After the recorded funds exceed the key supervision amount, the corresponding construction funds can be applied for withdrawal according to the construction nodes, or the part of funds exceeding the key supervision amount can be applied for withdrawal, and the withdrawal shall be examined and approved by the housing and urban-rural development (housing management) department of the district where the house is located.

At the same time, Beijing has also set a buffer period until the end of the year for all districts to assess the project situation and treat projects flexibly: for commercial residential projects that have obtained (including those under transfer) the right to use state-owned construction land before August 28 (inclusive) but have not obtained the construction project planning permit, the pre-sale management policy shall be implemented in principle in accordance with the newly acquired land projects. For projects that can ensure the completion and delivery on time confirmed by the district government, after filing with the municipal competent department, pre-sale can still be applied for in accordance with the original pre-sale conditions before the end of 2027 under the condition of strengthening pre-sale fund supervision.

Before the implementation of the Beijing new policy detailed rules, there was a phenomenon of "rushing to open" in the new residential market. According to the official public information of Beijing Municipal Commission of Housing and Urban-Rural Development, from August 28 to September 24, Beijing issued a total of 18 pre-sale permits. In the month before the introduction of the 828 New Policy, only 8 projects applied for pre-sale permits. The total number of projects that obtained pre-sale permits in June and July was only 16.

The following is the original text of the Beijing new policy:

Detailed Implementation Rules of Beijing New Property Policy

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The detailed rules of Beijing's "828 New Policy" have taken effect, which allows pre-sales after a single building is topped out, and the maximum deposit for home purchase is 1%.