China modernizes its Housing Provident Fund framework

The reform marks a broader shift in the role of the Housing Provident Fund. Traditionally associated mainly with home purchases and mortgage financing, the system is now being expanded to support a wider range of housing consumption, labour mobility and participation.

Broader use of Housing Fund balances

The most visible change is the expansion of the circumstances in which employees may withdraw their Housing Fund balances.

The revised Regulations now expressly include:

• renovation or decoration of owner-occupied housing;
• payment of property-management fees for owner-occupied housing; and
• other housing-consumption circumstances approved by the State Council.

The reform also makes Housing Fund withdrawals for rent more accessible. Renting was already a recognized withdrawal purpose, but the revised Regulations removed the previous national requirement linking eligibility to a prescribed proportion of household income.

The national reform provides the overarching framework, while local authorities will continue to determine detailed eligibility criteria, limits and procedures. For example, Beijing has introduced rules allowing eligible contributors to withdraw funds for the renovation of owner-occupied housing. Subject to the applicable requirements, withdrawals may reach 50% of the relevant renovation VAT invoice amount, capped at RMB 250,000 per property.

Faster administration and greater mobility

The revised Regulations also improve the administration and portability of the system.

Housing Fund Management Centres must generally decide withdrawal applications within three days of acceptance. For Housing Fund loans, the statutory decision period is shortened from 15 to 10 days.

Contribution records are also to be mutually recognized nationwide, supporting Housing Fund transfers and cross-regional loan services.

For employees moving between cities, this should make the system more portable and better aligned with an increasingly mobile labour market.

Broader coverage for flexible workers

The revised Regulations provide a clearer national basis for voluntary Housing Fund participation by flexible workers, building on pilot programmes introduced in a growing number of cities.

This includes self-employed individuals, platform workers, freelancers and other flexible workers outside the traditional employer-employee contribution model.

Stronger compliance framework

Greater flexibility for employees is accompanied by a stronger compliance framework. Employees have an explicit right to require employers to fulfil their registration and contribution obligations. Fines for certain failures relating to employer registration and the establishment of employee Housing Fund accounts increase from RMB 10,000–50,000 to RMB 50,000–300,000.

A broader economic and HR perspective

For employees, the reform makes Housing Fund balances more flexible and accessible. Broader withdrawal options, easier access to rental-related funds and greater portability across cities may make the Housing Fund more relevant to employees’ day-to-day housing needs.

For employers, the immediate priority remains compliance. The revised framework strengthens employees’ rights to require registration and contributions and increases penalties for non-compliance. Companies should therefore ensure that Housing Fund registration, contribution bases and employee accounts are properly managed.

For the broader economy, the reform goes beyond HR compliance. By making Housing Fund balances more accessible for renting, renovation, property management and other housing-related purposes, the policy is intended to support housing consumption and improve labour mobility.

For questions on the practical implications of the reform or your company’s Housing Provident Fund compliance, please feel free to contact us.