The Ministry of Finance, the State Administration of Taxation, and the Ministry of Housing and Urban Rural Development have issued a notice on tax policies to promote the stable and healthy development of the real estate market, clarifying multiple tax preferential policies to support the development of the real estate market.
The announcement clearly states that we will increase the preferential treatment of deed tax in housing transactions and actively support residents' rigid and improved housing needs; Reduce the lower limit of the pre tax rate for land value-added tax and alleviate the financial difficulties of real estate enterprises.
In terms of deed tax, the current area standard for enjoying a 1% low tax rate preferential treatment will be increased from 90 square meters to 140 square meters, and it will be clarified that Beijing, Shanghai, Guangzhou, and Shenzhen, as well as other regions, can uniformly apply the deed tax preferential policy for families' second homes.
After adjustment, nationwide, individuals who purchase their only and second homes for their families, as long as the area does not exceed 140 square meters, will be subject to a unified deed tax rate of 1%.
In terms of land value-added tax, the lower limit of the pre tax rate for land value-added tax in various regions will be uniformly reduced by 0.5 percentage points. Each region can adjust the actual pre tax rate based on local conditions.
In addition, it is necessary to clarify the preferential policies for value-added tax and land value-added tax that are linked to the cancellation of the standards for ordinary and non ordinary residential properties, reduce the transaction costs of second-hand houses, and maintain the stability of the tax burden of real estate enterprises.
In terms of value-added tax, after the cancellation of the standard for ordinary residential properties in cities, individuals who have purchased housing for more than 2 years (including 2 years) will be exempt from value-added tax. The previous regulations that levied value-added tax on individuals who have purchased non ordinary housing for more than 2 years (including 2 years) in Beijing, Shanghai, Guangzhou, and Shenzhen will be correspondingly suspended.
In terms of land value-added tax, cities that have abolished the standards for ordinary and non ordinary residential properties will continue to implement the preferential policy of exempting land value-added tax for taxpayers who construct and sell ordinary standard residential properties with a value-added amount not exceeding 20% of the deducted project amount.
Affected by this news, Chinese concept stocks and real estate companies rose ahead of the market, with Fangduoduo rising over 32% and Beike rising over 7%.