Published by ChinaMNC · Sanshui

Foshan Revises Housing Provident Fund Withdrawal Rules: Key Points for Foreign Founders

Foshan has updated its housing provident fund withdrawal measures, adding new withdrawal options for home renovation and property fees, and adjusting rules for rent, home purchase, and loan repayments. This article outlines the main changes and practical implications for foreign founders operating a company in Foshan.

Foshan Updates Housing Provident Fund Withdrawal Rules

Foreign founders operating a company in Foshan should be aware of recent revisions to the city's housing provident fund (HPF) withdrawal measures. The updated rules, which implement broader national requirements to expand the use of HPF savings and improve service efficiency, introduce new withdrawal scenarios and clarify existing procedures. The revised measures take effect on October 31, 2026, replacing the previous version issued in 2025.

New Withdrawal Options

Two new categories of withdrawal have been added:

• Home renovation: Employees and their spouses may withdraw HPF savings once for renovating their self-occupied housing in Foshan, provided at least eight years have passed since obtaining the property ownership certificate.
• Property management fees: Employees and their spouses may withdraw HPF savings to pay property management fees for self-occupied housing within Foshan. Withdrawals are permitted once per withdrawal year, which runs from July 1 to June 30 of the following year.

Additionally, the supervision and penalty chapter has been updated to align with national regulations on illegal withdrawals, specifying legal consequences and disciplinary measures.

Transitional Arrangements for Existing Withdrawals

For withdrawals related to home purchase, construction, major repairs, or mortgage repayments processed before February 29, 2024, the following applies: if the property ownership has not changed and the withdrawal quota has not been fully used, automatic transfers that are already active and not stopped will continue. If automatic transfers have terminated and the employee needs to withdraw again for the same property, the original rules still apply.

Clarifications on Contribution Requirements

The requirement of "continuous and full contribution for at least three months in the city" means that the employee must have had a personal HPF account in Foshan for at least three months and have made continuous full contributions for at least three months.

Annual vs. Monthly Withdrawal Frequency

Withdrawals can be made annually or monthly, depending on the purpose:

• Annual withdrawal: Within a withdrawal year (July 1 to June 30), an employee may apply once, withdrawing the allowable amount for 12 months of that year. Each withdrawal must be at least 12 months apart.
• Monthly withdrawal: Within a withdrawal year, an employee may apply once per month, with at least one month between withdrawals. Multiple withdrawals are allowed, each covering up to the current month, but duplicate applications for the same month are not permitted.

For example, if an employee chooses monthly withdrawals for rent in the 2025 withdrawal year and makes the last withdrawal on June 1, 2026, then for the 2026 withdrawal year: if switching to annual withdrawal, the next application can be made after 12 months, i.e., on or after June 1, 2027; if continuing monthly, the next application can be made on or after July 1, 2026.

No Retroactive Withdrawals

Withdrawals cannot be made retroactively for previous years in which no application was filed, nor for unused portions of months already applied for. Only the current withdrawal year can be claimed.

Rent Withdrawal Categories

Rent withdrawals are divided into three categories: renting public rental housing, renting commercial housing, and renting commercial housing as a multi-child family (defined as a family with three or more children under 18). In a single withdrawal year, an employee may apply under only one category, and the rental period must be specified.

If an employee qualifies for multiple categories within the same withdrawal year, the applicable category must be specified based on the rental period. For any period during which the employee rented public rental housing, the public rental housing category must be used.

Multi-Child Family Rent Withdrawal Limits

For multi-child families renting commercial housing, if the monthly rent does not exceed the monthly maximum withdrawal amount, the combined withdrawal amount for the couple is based on the actual rent paid. If the rent exceeds the maximum, the withdrawal amount is capped at 60% of the average monthly wage of employees in Foshan in the previous year, as published by the statistics department.

For example, if the monthly rent is 3,000 yuan and the 2024 maximum for multi-child families is 5,754 yuan, the couple can withdraw 3,000 yuan per month. If the rent is 6,000 yuan, the withdrawal is capped at 5,754 yuan per month.

Partial Month Withdrawals

If an employee withdraws rent for only some months within a rental period, they cannot later apply for the remaining months of that same period. For instance, if an employee rents from July 2024 to June 2025 and in December 2024 applies for August, October, and December 2024, they cannot later apply for July, September, or November 2024.

Home Purchase vs. Mortgage Repayment

Purchasing a home and repaying a mortgage are distinct withdrawal categories. If the home is purchased without a mortgage, the employee may apply for the home purchase withdrawal. If a mortgage is used and principal and interest are repaid monthly, the employee and spouse may apply for the mortgage repayment withdrawal.

For pure HPF loans: if the employee has set up automatic HPF offset (冲还贷), they cannot apply for mortgage repayment withdrawal and must use the offset. If not set up, they can apply for mortgage repayment withdrawal.

For combined loans (HPF plus commercial): if automatic offset is set up and there is still a balance in the personal account after offset and the withdrawal quota is not exhausted, mortgage repayment withdrawal is allowed. If no offset is set up, mortgage repayment withdrawal is allowed.

For commercial loans only: mortgage repayment withdrawal is allowed.

Property Ownership and Withdrawal Eligibility

For self-occupied housing purchased, built, renovated, or majorly repaired outside of marriage, the ownership is determined by the property registration. An employee who does not own the property cannot use it to withdraw HPF funds under their name; that is, the unregistered spouse cannot withdraw based on that property.

If the employee (property owner) processed withdrawals for a mortgaged home before February 29, 2024, the pre-2024 rules apply: the unregistered spouse cannot withdraw based on that property. If the employee never processed withdrawals for that mortgaged home before February 29, 2024, the new measures apply:

• For pure HPF loans: if automatic offset is set up, it can only be used for offset, not for mortgage repayment withdrawal. If not set up, the employee and spouse can apply for mortgage repayment withdrawal.
• For combined loans: if automatic offset is set up and the withdrawal quota is not exhausted after offset, the employee and spouse can apply for mortgage repayment withdrawal. If not set up, they can apply.

Properties Acquired via Gift, Inheritance, or Exchange

Self-occupied housing acquired through non-purchase means such as gift, inheritance, or exchange does not qualify for home purchase or mortgage repayment withdrawals, except when a spouse acquires the other spouse's ownership share through such means.

Timing and Limits for Home Purchase Withdrawal

Applications must be submitted at least six months after the purchase date and within two years of the purchase date. Only one withdrawal is allowed. The purchase date is determined by the date on the purchase contract or the date of purchase registered on the property ownership certificate. The withdrawal amount cannot exceed the actual purchase price paid, and a minimum balance of 500 yuan must remain in the personal account after withdrawal.

Call to Action: Foreign founders can contact ChinaMNC on WhatsApp / WeChat at +86 153 1898 8535 for help registering and operating a company in China.

This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.