If you work in China or plan to, you’ll hear about the “housing fund” sooner or later. The housing fund in China is a big deal for anyone earning a salary, buying a home, or even renting. 

It is a special savings plan that helps people afford housing, and it is required by law for most employees and employers.

Whether you’re a local worker, an expat, or an employer, knowing how the housing fund in China works can save you money and help you make smart choices about your home. 

Let’s break down what it is, how it works, and why it matters.

What is the Housing Fund in China?

The housing fund in China, also called the housing provident fund, is a government-run savings plan. Both employees and employers must pay into it every month. The money goes into a special account in your name. You can use it later for buying, building, or renovating a home, or even for renting.

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The main goal of the housing fund is to help people save for a house and make housing more affordable. Local housing fund agencies manage the accounts and set the rules, but the system is nationwide.

How Does the Housing Fund in China Work?

Every month, a part of your salary is taken out and put into your housing fund account. Your employer matches this amount and pays it in too. The total amount is usually a percentage of your monthly wage. The money builds up over time and earns a little interest.

Participation is mandatory for most full-time employees in cities. Some part-time workers, freelancers, and expats may not have to pay, but many companies enroll all staff as a benefit.

🔎 Want to know more about salaries and wages in China? Check out our guide to the average salary in China.

Who Needs to Pay into the Housing Fund in China?

If you are a Chinese citizen working in a city, your employer is required by law to pay into the housing fund for you. Both you and your employer pay a set percentage of your salary each month.

For expats and foreigners, not all cities allow or require foreigners to participate in the housing fund. Some cities, like Shanghai and Beijing, allow expat participation, while others do not, or have changed their rules in recent years. 

Policies can change, so always check with your local housing fund bureau or your HR department for the most current information.

Employers must register employees for the housing fund and make sure payments are made on time. If an employer skips payments, they can face fines and penalties.

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🔎 Want to know more about labor rules? Browse our guide to China’s minimum wage.

What Are the Benefits of the Housing Fund in China?

The biggest benefit of the housing fund in China is that you can use the money for major housing expenses. Here’s what you can do with it:

• Buy a home (your first or a second one)
• Build or renovate a house
• Pay off your mortgage
• Rent an apartment (only in some cities, and with annual withdrawal limits and approval from the local housing fund bureau)
• Get a low-interest housing loan

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The interest rates for housing fund loans are much lower than bank loans, which can save you a lot of money over time. Plus, the savings are tax-free while they’re in the account.

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💡 Keep in mind: Not every city allows withdrawals for rent, and there are annual limits on the amount you can withdraw for renting. Always check your city’s specific rules before making plans.

How to Use Your Housing Fund in China

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Using your housing fund is pretty straightforward. Here’s a quick guide:

1. Buying a Home: You can withdraw your savings or apply for a low-interest loan when you buy a home.
2. Renting: In some cities, you can use your housing fund to pay rent, but you must provide a valid rental contract and sometimes proof of residence registration. Annual withdrawal limits may apply.
3. Renovation: If you’re fixing up your home, you can use your housing fund savings for the work.
4. Mortgage Payments: You can use your fund to pay off your mortgage faster.

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To withdraw money or apply for a loan, you’ll need your housing fund account details, proof of your housing expense (like a contract or invoice), and your ID. The local housing fund agency will review your application and tell you what to do next.

Housing Fund Contribution Rates in Major Chinese Cities

The amount you and your employer pay into the housing fund depends on where you work. Every city sets its own rates. Here’s a rough guide:

• Beijing: 5% to 12% of your monthly wage (for both employee and employer)
• Shanghai: 7% of your monthly wage
• Guangzhou: 5% to 12%
• Shenzhen: 5% to 12%

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These rates and the minimum and maximum base salary caps for contributions are set by each city and can change every year. For example, in 2024, Beijing’s rate is 12% for both employer and employee (24% total), with a capped contribution base. 

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💡 Always confirm the latest rates and caps with your HR department or the local housing fund bureau.

How the Housing Fund Works for Foreigners and Expats in China

Foreigners and expats can participate in the housing fund in some cities, but not all. Some cities such as Shanghai and Beijing allow expats to join if the company agrees, but other cities may not permit it or may have changed their rules. 

Policies for expat participation can change frequently, so always check with your local housing fund bureau or HR team to see if you are eligible and what the procedures are.

To join, your employer needs to register you and start making payments. You’ll get the same benefits as local staff, including the chance to apply for a housing fund loan or use your savings for rent.

Some expats find it tricky to use the fund, especially if they move between cities or leave China. It is important to ask your HR team about the local rules and how you can access your money if you relocate.

How the Housing Fund Affects China’s Real Estate Market

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The housing fund in China is a huge part of the real estate market. It helps millions of people buy homes and keeps demand steady. 

Because the housing fund offers low-interest loans, more people can afford to buy property. This keeps the market active.

The government uses the housing fund to support home ownership and control property prices. When the market gets too hot or too cold, they can change the rules. For example, they might raise or lower loan limits to keep things balanced.

Recent Changes and Trends in the Housing Fund

The Chinese government often updates the rules for the housing fund to fit new needs. In recent years, there have been changes to make it easier for more people, including expats, to join. Some cities now let you use the fund for renting, not just buying.

There are also efforts to make the fund more flexible, such as allowing easier transfers when people change jobs or move to another city. However, not all cities have the same policies, and some may be more restrictive than others. 

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💡 Always check your local rules before making any decisions about your housing fund.

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The government is watching the real estate market closely and may adjust the housing fund rules again to keep housing affordable.

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🔎 Want to know how social security fits in? Discover how China’s social security system works.

Conclusion

The housing fund in China is a valuable benefit that helps locals and many expats save for a home, access low-interest loans, and even cover rent in some cities. 

Rules and participation can vary a lot by city, especially for expats and for using the fund for rent. Always check your own situation with your HR or local housing fund bureau, and keep track of your contributions. 

If you need legal advice or have questions about your housing fund rights, reach out to Choi & Partners for expert support. Make sure you understand your options and get the most from your housing fund benefits.

Frequently Asked Questions

What is the housing allowance in China?

A housing allowance in China is extra money some employers give to help workers pay for rent or mortgage costs. It is different from the housing fund, which is a government savings plan. The allowance is usually paid as part of your salary and is up to your employer.

What is the new housing policy in China?

The new housing policy in China focuses on making homes more affordable and supporting people who want to buy their first home. The government is also encouraging more use of the housing fund for renting and adjusting loan rules to keep the real estate market stable.

Who owns housing in China?

In China, people can buy and own homes, but the land is owned by the state. When you buy a home, you get the right to use the property for a set number of years, usually 70 years for residential property.

What happens if you change jobs or move cities?

If you change jobs or move to a new city, your housing fund account can be transferred. Your new employer should help with the process, and your savings will stay safe. The transfer process may vary by city, so check with your new HR department or the local housing fund bureau for the correct steps.

Can you withdraw the housing fund when leaving China?

Yes, if you leave China for good, you can usually withdraw your housing fund savings. You’ll need to show proof that you’re leaving and fill out some forms at the housing fund office. The process and paperwork required can vary, so check with your local housing fund bureau for the latest information.

What should you do if your employer doesn’t pay into the housing fund?

If your employer is not paying into the housing fund, you should talk to your HR department first. If the problem isn’t fixed, you can report it to the local housing fund office for help. Employers can face fines or penalties for not making the required contributions.

How do foreigners and expats use the housing fund in China?

Foreigners and expats can use the housing fund in cities that allow it. They can save money, apply for loans, and sometimes use the fund to pay rent, just like local employees. Eligibility and rules depend on the city and can change, so always check with your employer or local housing fund bureau for the latest requirements.

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Related articles:

Retirement Benefits in China: Policies and Eligibility Criteria

Why You Need an Employer of Record to Succeed in China

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