BEIJING, 21st November, 2024 (WAM) -- House buying intention has seen an increase after Beijing and Shanghai announced further tax incentives on Monday.
According to China Central Television (CCTV), the two cities have announced the elimination of the distinction between ordinary and non-ordinary housing. This change is expected to lead to a reduction in taxes for property transactions.
Houses over 140 square metres are usually classified as non-ordinary housing and face higher transaction tax rates.
In accordance with the new policy, which will take effect on 1st December, the two cities will exempt individuals from a 5-percent value-added taxes (VAT) on the sale of non-ordinary properties owned for two years or more.
The two cities will also adopt a unified nationwide policy on personal housing deed tax.
For homes measuring 140 square metres or less, the deed tax is reduced to the minimum rate of 1 percent, while a reduced rate of 1.5 percent applies for properties larger than 140 square metres.
For those purchasing a second home for their family, a reduced deed tax rate of 1 percent will be levied for properties of 140 square metres or smaller, while a reduced rate of two percent will apply for properties larger than 140 square metres.
In response to the sluggish property market, China has introduced a series of measures in recent months, including reductions in mortgage rates, lower down-payment requirements, and the easing of purchase restrictions.