Beijing trims property resale tax in fresh push to stabilise housing market
Under new rules, sellers will pay just 3 per cent VAT if they offload a property within two years of purchase, down from 5 per cent
Mainland China will cut or waive value-added tax (VAT) on the resale of homes by individuals from Thursday, in its latest move to shore up a property market that has been stuck in a prolonged slump.
Under the new rules, individuals who sell a residential property within two years of buying it will pay VAT at 3 per cent, down from 5 per cent, according to a joint statement released on Tuesday by the Ministry of Finance and the State Taxation Administration.
The policy does not apply to corporate sellers.
Sellers who have held their homes for two years or longer would continue to enjoy a VAT exemption, the statement said.
The authorities added that for housing sales where VAT had not yet been declared or paid before Thursday, the new provisions could be applied if the eligibility requirements were met.
Analysts said the tax incentives were the latest in a string of measures aimed at stabilising the real estate sector after years of falling prices and weak demand, a downturn that has pushed some heavily indebted developers into crisis and weighed on broader consumer sentiment.