China declares tax insurance policies to spice up property market | USAEMALL.com

UNIFORM DEED TAXES

The measures, which come into force on Dec 1, include an increase in the minimum area for homes eligible for a 1 per cent low tax rate from 90sq m to 140sq m, which used to be taxed up to 3 per cent.

The deed tax policy for second homes in the four cities of Beijing, Shanghai, Guangzhou and Shenzhen will also be brought in line with the rest of the country, CCTV said.

That means householders buying their only home or second home will pay a unified 1 per cent deed tax rate, provided the area does not exceed 140sq m.

Other policy reforms include the uniform reduction of the minimum pre-collection rate of land VAT by 0.5 percentage points across regions.

And individuals who sell homes that have been owned for two years or more will be exempt from VAT in cities like Beijing, Shanghai, Guangzhou and Shenzhen.

Ahead of Wednesday’s policy announcement, China last week unveiled an ambitious plan to relieve public debt, aiming to turn local governments away from belt-tightening practices that have exacerbated the domestic downturn.

Policymakers approved a proposal to swap 6 trillion yuan (US$840 billion) of hidden debt belonging to local governments for official loans with more favourable terms.

Hidden debts are defined as borrowing for which a government is liable, but not disclosed to its citizens or to other creditors.

This move would free up space for local governments to better develop the economy and protect people’s livelihoods, CCTV said.