(Yicai) Feb. 25 -- Shanghai will now allow residents from outside the city to purchase new properties anywhere in the metropolis provided they have paid social insurance for a year, as the Chinese megacity continues to relax homebuying curbs to boost the struggling real estate market.

Previously, non-local families were only allowed to purchase properties outside the Outer Ring Road. From tomorrow, non-Shanghai residents can buy new homes anywhere in the city so long as they have made one year of social insurance payments, according to a government notice released today. Non-local families who have paid social insurance for three years can now buy up to two homes inside the Outer Ring Road.

The new housing policy, which is made up of three main categories with seven adjustments, aims to make it easier for people to buy a home and to support the housing needs of stable resident groups.

Previously, people working in city services or for companies headquartered outside Shanghai could not buy a home in the city due to their lack of local social security contributions. The new policy supports the housing needs of this stable resident group by allowing those who have held a residence permit for five years to qualify for home purchases. In the past, eligibility mainly depended on how long a person had paid social insurance, but the new rules also allow the length of time a residence permit has been held to count.

This clearly demonstrates that the barriers for non-local families to buy in Shanghai have been significantly lowered, and the waiting costs are decreasing, said Yan Yuejin, deputy director at the Shanghai E-House Real Estate Research Institute.

“These seven measures cover a variety of housing needs,” Yan said. “They help both local and non-local families as well as individuals engaged in urban basic services and families with multiple children. Combined with other relaxed policies already in place, this should unlock more homebuying demand, smooth out property swaps, and support a stable, healthy real estate market.”

The city is also rolling out a series of favorable loans and property tax perks. In terms of mortgage rates, the maximum public housing fund loan for first-time buyers has been raised to CNY3.2 million (USD465,880) from CNY1.6 million.

The adult children of Shanghai residents will also be exempt from property tax on a swapped home if it is their only residence. Previously, their first home was not subject to property tax, but replacement homes could trigger the tax.

Editor: Kim Taylor