China Expands Housing Fund Use for Property Fees, Renovation

China’s Ministry of Housing and Urban-Rural Development (MOHURD) on June 5 released a landmark draft revision to the Housing Provident Fund (HPF) Management Regulations, proposing to expand withdrawal categories from six to nine and allow flexible workers to voluntarily participate in the system for the first time. The move, now open for public comment until July 5, represents the most significant overhaul of China’s HPF system since its establishment in 1999, according to Xinhua News.

What the Reform Proposes

The revised draft adds three new withdrawal categories: home decoration and renovation (up to a certain limit), property management fees for self-occupied housing, and a flexible “other housing consumption” category approved by the State Council. This expands the existing six categories — rent, purchase/construction/repair, mortgage repayment, retirement, total disability, and emigration — to nine.

As Jiemian/Interface News reports, MOHURD stated that China’s housing market is shifting from rapid expansion to a stock-focused, quality-improvement phase, with demand moving from “having housing” to “having good housing.” The ministry noted that the current real estate market “supply-demand relationship has undergone major changes, placing new demands on the operation of the HPF system.”

Perhaps most significantly, the draft allows self-employed individuals, non-full-time employees, and other flexible workers to voluntarily join the HPF system, with specific rules to be determined by city-level governments. This opens the door for millions of gig economy workers — delivery drivers, freelancers, and independent contractors — to access housing support for the first time.

Building on Local Experiments

The national-level revision formalizes what has already been happening on the ground. According to Southern Weekly, at least 25 cities across China began allowing HPF withdrawals for property fees in 2026, and at least eight cities permitted withdrawals for home renovation — with annual limits ranging from 2,400 yuan in Nanning to 10,000 yuan in Hangzhou and Nantong.

Fuzhou emerged as an early adopter of renovation withdrawals. By March 28, the city had processed 329 withdrawals totaling 27.93 million yuan, with one resident reporting that 108,000 yuan arrived in their account within two to three hours of submitting documents online.

This expansion marks a notable reversal. As Lu Wenxi, market analyst at Shanghai Centaline Property, explained to Southern Weekly, the HPF previously allowed renovation withdrawals, but widespread fraud and cash-out abuses around 2017 led to a nationwide suspension. The current revision represents the first major relaxation in nearly nine years.

A 10.93 Trillion Yuan Opportunity

At the end of 2024, China’s national HPF held accumulated deposits of 32.79 trillion yuan, with a balance of 10.93 trillion yuan sitting idle. As CCTV reported via Sina Finance, experts say the new policies indicate the HPF is transforming from a single “home purchase tool” into a “comprehensive livelihood account” covering the full lifecycle of housing.

Yan Yuejin, vice president of Shanghai E-House Real Estate Research Institute, told Jiemian that the HPF’s influence has grown significantly in recent years, with loan scales in property transactions increasing markedly. The expansion, he noted, builds on local innovations already being explored across the country.

Analysis: Implications and Challenges

The reform carries significant economic implications. By unlocking the 10.93 trillion yuan idle balance for broader housing consumption, policymakers aim to stimulate related industries — home renovation, property management, and home improvement sectors stand to benefit directly. The inclusion of flexible workers also represents a meaningful expansion of China’s housing support social safety net.

However, challenges remain. The history of renovation withdrawal abuse suggests robust verification mechanisms will be critical. Li Yujia, chief researcher at the Housing Policy Research Center of the Guangdong Provincial Urban-Rural Planning Institute, proposed a trustee payment model to Southern Weekly, where HPF centers would pay property management and heating companies directly rather than reimbursing contributors.

Another open question is how China’s four tier-1 cities — Beijing, Shanghai, Guangzhou, and Shenzhen — will respond. Currently, none support renovation withdrawals, and Shanghai’s property fee withdrawals are limited to low-income and subsidized housing families.

What’s Next

The public comment period runs through July 5, 2026, after which the final regulations are expected to be promulgated. The draft also mandates digital capacity building for HPF management and promotes cross-regional mutual recognition and lending — measures that could further streamline the system.

As China’s housing market continues its transition from breakneck construction to quality-focused stewardship, the HPF reform signals a broader shift in how the government approaches housing support: less as a tool for buying homes, and more as a flexible safety net for the entire journey of homeownership.