2 weeks Ago By Yuke Xie
Chinese authorities are gearing up to ease tax rules related to residential property transactions, a move that analysts view as “very positive” for boosting the nation’s struggling market and freeing up household cash for consumption. A range of new policies are currently under review to reduce taxes for both homebuyers and sellers, the Ministry of Finance said on Friday. These measures will be introduced “in the near future”, alongside additional fiscal policies to support the economy, it said.
Homebuyers may see a potential 2 per cent reduction in the deed tax on transaction values, which could be “beneficial to home transactions, especially in big cities where prices are elevated”, said Jeff Zhang, an equity analyst at US research firm Morningstar. For sellers, a 5 per cent value-added tax on properties sold within two years might also be removed, while a potential reduction in personal income taxes could help boost overall consumption, Zhang added. For example, on a property costing 10 million yuan (US$1.
38 million), such tax breaks could help buyers save around 200,000 yuan, while sellers could see total savings of around 300,000 yuan in value-added and personal income taxes, according to Yan Yuejin, vice-president of the Shanghai-based E-House China Real Estate Research Institute. “These tax savings are pretty sizeable, and especially positive for the second-hand housing market, which could see more listings and accelerated sales,” he said..
