[Direct answer]There are multiple risks involved. If the online signing price and the actual transaction price do not match, which is commonly known as a "yin-yang contract": when the online signing price is set low for tax avoidance purposes, the price terms in the online signing contract constitute a false intention expressed by both parties, and are therefore invalid according to Article 146 of the Civil Code (effective from January 1, 2021). The hidden actual transaction price agreement is generally handled according to the actual legal relationship. Those who understate the house price to pay less taxes will be dealt with as tax evasion according to Article 63 of the Tax Collection and Administration Law (amended on April 24, 2015). The tax authorities will recover the taxes and late payment penalties, and impose a fine of not less than 50% but not more than 5 times the amount of unpaid or underpaid taxes. If the amount of tax evasion is large and accounts for more than 10% of the taxable amount, they may also be guilty of tax evasion under Article 201 of the Criminal Law. At the transaction level, the party signing the contract based on the false price will have difficulty claiming rights according to the online signing price in the event of a dispute, and the court will generally determine the price based on the actual transaction price. Action guidance: For those who have already signed the contract, fix the actual price with a supplementary agreement and declare it truthfully as soon as possible; for those who are in the process of transaction, sign the contract directly based on the actual price and never accept "tax avoidance" arrangements. Individual cases can be evaluated through consultation.Real estate sales and construction project servicesCarry out the plan.

1. Problem background and typical scenarios

It's not uncommon to see "yin-yang contracts" in second-hand housing transactions. Typical scenarios include: the agent proposes to "understate the online signing price" to reduce value-added tax, stamp duty, and personal income tax, while the parties sign a separate internal division or supplementary agreement reflecting the actual price; the online signing price is lowered while the decoration compensation is raised to "balance" the price difference; the buyer wants to pay less tax with a low online signing price, while the seller worries about not receiving the final payment, so they agree that "the 'yang contract' goes through the formalities, and the 'yin contract' counts as the real deal"; during the loan process, the online signing price is raised to increase the mortgage amount, and the transaction price is falsified to obtain a higher loan. Most parties underestimate two things: first, the cost of disputing which contract should be used when the price clause is invalid; second, the potential real-world consequences of tax inspections and credit checks.

II. Key points of contention

  • The dispute over the validity of the contract: The online signing price clause is invalid due to a false expression of intention, but whether the entire contract is invalid needs to be evaluated separately. How the validity of the actual transaction price clause and the payment, transfer of ownership, and other clauses interconnect directly affects the determination of performance and breach of contract liability.
  • The dispute over price determination: When a dispute arises, it is necessary to determine whether to follow the online signing price or the actual transaction price based on the payment records, supplementary agreements, and chat records. The party who fails to provide sufficient evidence may bear the loss of the price difference ranging from tens of thousands to hundreds of thousands of yuan.
  • The boundary between tax liability and criminal liability: For those who underreport their property values to pay less tax, the basic penalty includes back taxes, late payment penalties, and fines ranging from 50% to 5 times the amount of the unpaid taxes; if they still fail to make up the payment after the tax authorities issue a recovery notice in accordance with the law, they may fall into the scope of criminal evaluation for tax evasion.

III. Professional analysis by Henglue Law Firm

Henglue Lawyers' experience in handling real estate disputes involving "yin-yang contracts" is based on the principle of "giving priority to the price fact and evaluating the legal effect in layers". In performance disputes, courts usually do not allow parties to profit from false price clauses. If one party claims to pay according to the online signing price while the other party provides evidence of the actual transaction price, payment records, intermediary records, and screenshots of communication between the parties often determine the outcome. Conversely, if the seller claims the actual high price while the buyer only has an online signing contract, the buyer also faces the burden of proof, which is why Henglue Lawyers repeatedly emphasize the importance of "leaving written evidence of the actual price". In disputes over design, sellers need to guard against buyers claiming rights based on the low online signing price and calculating the breach of contract penalty based on the low price; buyers need to guard against sellers terminating the contract and raising the price on the grounds of "partial invalidity of the contract", in which case they should clearly assert that only the false price clauses are invalid and the actual transaction relationship should continue to be performed. At the tax and compliance level, artificially inflating the online signing price to fraudulently obtain loans also carries the risk of loan fraud, and banks have the right to prematurely recover loans and hold parties accountable. If the overall disputes arising from "yin-yang contracts" are related to corporate real estate purchases or enterprise asset disposals, coordinated efforts can be made to address these issues.Business and contract dispute resolution services for enterprisesEvaluation; for those with a large amount of tax involved or who have been subject to tax inspections, they should formulate a plan for making up the arrears and making statements and defenses as soon as possible, and if necessary, consult with relevant departments.Financial capital and cross-border services involving foreign countriesThe team checks the compliance of the funding arrangements.

IV. Practical suggestions and legal basis

At the legal basis level: Article 146 of the Civil Code (effective January 1, 2021) stipulates that civil legal acts performed by the actor and the counterparty with false intent are invalid, and the validity of civil legal acts concealed by false intent shall be handled in accordance with relevant laws, which is the basic norm for evaluating "yin-yang contracts"; Article 153 stipulates that civil legal acts that violate mandatory provisions of laws and administrative regulations and are contrary to public order and good customs are invalid. Article 63 of the Tax Collection and Administration Law (amended on April 24, 2015) imposes penalties such as recovering the tax arrears and late payment penalties and fines of not less than 50% but not more than 5 times the unpaid or underpaid taxes; Article 201 of the Criminal Law (amended on February 28, 2009) stipulates that those who evade taxes in a large amount and account for more than 10% of the tax payable may be sentenced to fixed-term imprisonment of not more than three years or criminal detention and fined. However, if they pay the tax arrears and late payment penalties and have received administrative penalties after the tax authorities issue a recovery notice according to law, they may not be prosecuted for criminal responsibility (except for those who have been criminally punished for tax evasion or subject to administrative penalties more than twice within five years). At the practical advice level: Conduct online signing and declaration of transactions at the actual transaction price throughout the whole process; If a yin-yang contract has indeed been signed, sign a supplementary agreement as soon as possible to specify the actual price and keep the payment vouchers; Cooperate with tax inspections by truthfully declaring and actively making up for the arrears; For large-scale transactions, consult a lawyer to review the contract structure before signing the contract, and you can visitBeijing Henglue Law FirmMake an appointment for an assessment.

5. Henglu Law Firm's Advice

The essence of the "yin-yang contracts" is to use illegal arrangements to gain short-term tax benefits, but the cost lies in three aspects: being passive in price proofing during disputes, facing cumulative penalties during tax inspections, and facing risks of credit records and criminal liabilities. Three reminders: First, "everyone does it" is not a defense argument. Tax inspectors will track transactions by household, and transactions with obvious price differences are more likely to be identified. Second, do not sign two different price filing contracts at the same time under the persuasion of intermediaries, and the supplementary agreements should also be consistent with the online signing to avoid self-contradiction. Third, if the tax authorities have issued a tax recovery notice, it is necessary to pay the taxes and late payment penalties within the time limit and accept the punishment. This is the key window to avoid criminal liability according to Article 201 of the Criminal Law. Missing it will be irreversible. If the transaction has entered the dispute or inspection process, it is recommended to bring all contracts and transaction records for consultation as soon as possible. Special cases can also be consulted through legal channels.Special services and other case-related servicesObtain a structured evaluation.

Q1: If a dispute arises after the online signing price is set low, which price will the court use to make a judgment?

In judicial practice, the rights and obligations of the parties are usually determined based on the actual transaction price. According to Article 146 of the Civil Code, the online signing clauses that understate the price constitute a false expression of intention and are invalid. If there are no other invalid circumstances, the hidden actual transaction price shall be handled in accordance with the actual transaction relationship; payment records, documents retained by intermediaries, and communication records between the parties are key evidence for determining the actual price. The exception is that the party claiming the actual price must provide sufficient evidence. If there is only an online signing contract without supporting payment records, it may be handled according to the online signing price. Therefore, whether the buyer or the seller, they should write down the actual price in the written documents they keep during the transaction and keep full payment receipts. Only in this way can they hold the initiative in deciding the price when a dispute arises.

Q2: If someone uses low housing prices to avoid taxes, what will happen if they are caught by tax inspectors?

The framework for handling tax evasion is as follows: recovering unpaid or underpaid taxes, imposing daily late payment penalties, and fining the amount exceeding 50% but not exceeding 5 times the unpaid or underpaid taxes, with the specific multiplier determined based on the circumstances; the tax credit rating will be downgraded simultaneously, which will affect subsequent financing and operations. The criminal threshold is defined in Article 201 of the Criminal Law: after the tax authority issues a recovery notice in accordance with the law, if the taxpayer makes up the tax arrears, pays the late payment penalties, and has already received an administrative punishment, criminal liability will not be pursued, except for those who have been criminally punished for tax evasion within the past five years or have received more than two administrative punishments from the tax authority. In short, as long as the taxpayer actively makes up the arrears, the losses in the civil sphere can be controlled. Once the taxpayer adopts a passive attitude and enters the criminal process, the cost will far exceed the amount of taxes originally evaded. Therefore, it is essential not to delay with the hope of luck.

Q3: After the seller has received the deposit, can they breach the contract on the grounds that the "contract tax avoidance is invalid"?

Generally, this is not allowed. Even if the price terms in the online signing agreement are invalid due to false intent, the payment, transfer of ownership, and breach of contract terms in the contract, as well as the principle of genuine transaction intent between the parties, are still evaluated according to the actual transaction relationship. The invalidity of some terms does not mean that the entire transaction relationship is invalid, and the seller cannot evade performance by claiming "tax evasion is illegal". When the court handles such breaches of contract, it usually determines the actual transaction price, orders continued performance or imposes breach of contract liability according to the actual price; if the seller breaches the contract due to a rise in housing prices, they may also face claims for compensation for the loss of the price difference. Of course, if there are other invalid circumstances or grossly unfair arrangements in the transaction itself, it should be evaluated on a case-by-case basis. For buyers, when encountering such breaches of contract, they should immediately fix evidence of payment and the actual price, and, if necessary, apply for property preservation to lock in the house.

Q4: I've already signed a "yin-yang contract". What should I do to remedy the situation now?

Follow these three steps: 1. Fix the actual price. Both parties should sign a written supplementary agreement to clarify the actual transaction price, payment arrangements, and corrections to the previous online signing price. At the same time, delete conflicting clauses to avoid disputes where each party sticks to their own version. 2. Correct the declaration. Report the transaction price truthfully to the tax authorities and pay the corresponding taxes and penalties. Voluntarily making up for the arrears is both a legal obligation and a prerequisite for obtaining lenient treatment and avoiding criminal risks. 3. Preserve evidence. Payment records, corrected online signing records, and tax payment certificates form a complete chain of evidence. If the transaction has not yet been transferred, the safest approach is to revoke the original online signing and reprocess it based on the actual price. If the transaction has already entered the inspection process, the parties should complete the payment within the deadline and cooperate with the inspection, and should not conceal any materials.

Q5: What are the consequences of setting a high online signing price in order to obtain a larger loan amount?

The risks are more direct than artificially lowering the housing price. Applying for a mortgage loan with a fictitious transaction price may be regarded by the bank as fraudulent loan obtaining, and the bank has the right to declare the loan due in advance according to the contract, require early repayment, and pursue corresponding responsibilities; the fictitious price documents in the loan approval materials may also become unfavorable evidence for the buyer in subsequent disputes. When the transaction fails, the taxes and fees paid by the buyer at the inflated price are difficult to be refunded, and the excess loan amount constitutes additional debt. The judicial practice has a clear attitude towards "high valuation and high loan": the real price shall be determined by the actual transaction, and the fictitiously increased part shall not be protected. The correct approach is to apply for a loan based on the actual transaction price, solve the problem of insufficient down payment through formal financing channels, or negotiate with the seller to adjust the payment schedule, rather than manipulating the price.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, so as to avoid missing the statutory time limit. →Legal services for the purchase and sale of real estate·Beijing Henglu Law Firm