China announces new tax policy to support real estate market

China's Ministry of Finance said tax incentives will be adjusted to strongly support housing demand while easing the financial burden on real estate businesses.

An apartment building construction site in Xi'an, Shaanxi province, China - Photo: KYODO/TTXVN

On November 13, the Chinese government announced a series of new tax policies to revive the struggling real estate market.

These measures include reducing transfer duty and value-added tax (VAT) on residential transactions.

China's Ministry of Finance said tax incentives will be adjusted to strongly support housing demand while easing the financial burden on real estate businesses, state broadcaster CCTV reported.

Under the new policies, effective from December 1, the government will impose a 1% transfer tax on houses with an area of ​​up to 140 square ^meters , instead of the current 90 square ^meters .

Previously, houses with an area larger than 90 square ^meters were subject to a tax of up to 3%.

In addition, the transfer tax on second homes in four major cities such as Beijing, Shanghai, Guangzhou and Shenzhen will be adjusted to align with other areas across the country, applying a uniform tax rate of 1% for those buying their first or second home, with a maximum area of ​​140 square ^meters .

Also under these measures, the value-added tax (VAT) rate on land will be reduced by 0.5 percentage points nationwide.

Individuals will be exempt from VAT when selling a home they have owned for more than two years, applicable to major cities such as Beijing, Shanghai, Guangzhou and Shenzhen.

In addition to tax measures, China has also rolled out a wide range of economic support policies, including cutting interest rates and easing restrictions on home purchases.

The government has also reduced down payment requirements for housing transactions to 15% and relaxed home purchase requirements.

Over the past two decades, China's real estate market has contributed a large portion to its gross domestic product (GDP), accounting for about 25%.

However, in recent years, the industry has faced a sharp decline, as real estate businesses struggle with debt while the government is targeting GDP growth of about 5% this year.

In response, China has announced a series of support measures, including pledging more than $500 billion in credit for unfinished housing projects.

Source: https://tuoitre.vn/trung-quoc-cong-bo-chinh-sach-thue-moi-ho-tro-thi-truong-bat-dong-san-20241114140504209.htm