A Couple Left Their Home to Charity. Selling It Would Cost 4.5 Million Yuan in Taxes.
A childless Shanghai couple willed their apartment and savings to help children with heart disease. After their deaths, the foundation inheriting the home found that selling a donated property is taxed like a corporate deal — about 4.5 million yuan on a 6.5-million-yuan flat.
Du Yingrong and Lu Suying, a Shanghai couple with no children, spent their later years the way they had spent their whole ones: frugally, and giving. Over their lifetime the couple donated more than five million yuan to help children born with congenital heart disease. In 2018 they went further, notarizing a will that left their remaining savings and their apartment — together worth about 6.5 million yuan — to a charity foundation, with instructions that the money go to children from struggling families with the same condition.
They died in April. Then their gift ran into arithmetic. To turn the apartment into grants, the foundation must first take title to the property and then sell it — and once the house sits on a foundation's books, its sale is taxed at corporate rates. The bill comes to roughly 4.5 million yuan, about seventy percent of the property's value, as Kankan News reported this week. The foundation's vice president told the broadcaster the total taxes owed on the couple's estate would reach 4.56 million yuan. The bequest may end up doing a fraction of the good they intended.
The story hit Baidu's trending board at No. 33 and Zhihu's front page within days, and the argument there is less about the couple than about the system. China's Charity Law promises tax benefits for donations, but inheritance giving — property especially — falls into a gap: assets that pass to a charity after death are treated, for tax purposes, like a corporate transaction, not like the charitable act the donor intended. Officials and academics have floated fixes, including exempting charitable property transfers, but the case shows how a well-meaning estate plan can still be caught by rules written for other situations.
The discussion online has been angrier than the usual charity story. A popular Zhihu answer asked why the law "makes goodness so expensive," while one Weibo user put the choice bluntly: "Clogging loopholes is right, but don't shut real donations out with them." The foundation, for its part, has said it is seeking a lawful path to reduce the burden rather than refusing the bequest.
The couple's old possessions — an enamel mug, three worn mobile phones, handwritten notes — are on display in their neighbourhood as a small memorial. Whether the apartment can be sold without a seven-figure tax bill is now the question that determines what their last wish is worth.