China cuts taxes for home purchases

China announced Nov. 13 to cut the home purchase deed tax to 1% for buyers of first and second homes of 140 square meters and below, from the current level of as much as 3%. The tax cut will take effect Dec. 1, according to the Ministry of Finance.

A sales person with a new residential compound introduces housing units available for purchase to potential homebuyers. Photo from China Real Estate Business

In addition, after scrapping the standards of identifying ordinary and non-ordinary properties, homeowners will no longer be charged value-added taxes if sellers have kept them for two years or more.

The new policy also applies to Shenzhen, Beijing, Shanghai, and Guangzhou. At present, in Shenzhen, the deed tax for the second home generally depends on the size of the home. If the area of the home is less than 90 sqm, the deed tax is usually 1% of the total housing price. The deed tax for apartments larger than 90 sqm ranges between 1.5% and 3%.