Source: Wall Street News
On May 27, the four departments of Shanghai jointly issued the “Notice on Policies and Measures to Optimize the Stable and Healthy Development of the City's Real Estate Market”, which clearly shortens the social security or personal tax period required for non-Shanghai buyers, reduces the down payment ratio, optimizes the lower loan interest rate limit, increases the amount of provident fund loans, and supports the reasonable housing needs of families with many children.
The main changes are as follows:
1) The minimum down payment ratio for commercial personal housing loans for the first housing unit was adjusted to not less than 20%.
2) The lower interest rate limit for the first housing commercial personal housing loan was adjusted to be reduced by 45 basis points not lower than the market quoted interest rate (LPR) for the corresponding term loan.
3) The minimum down payment ratio for commercial personal housing loans for two housing units was adjusted to not less than 35%.
4) The lower interest rate limit for commercial personal housing loans for two housing units was adjusted to 5 basis points less than the market quoted interest rate (LPR) for the corresponding term loan.
5) Adjust the social security or personal tax period required for non-Shanghai residents to purchase a home from “continuous payment of 5 years or more” to “continuous payment of 3 years or more”.
6) For the first home, the maximum loan for the personal Provident Fund is 800,000 yuan, and the maximum loan for the Family Provident Fund is 1.6 million yuan. The policy of increasing the maximum loan amount of loans for families with many children by 20% remains unchanged, that is, it can reach up to 1.92 million.
The full text of the notice is as follows:
Shanghai optimizes and adjusts real estate market policies
Comprehensive measures to support reasonable housing demand and promote the steady and healthy development of the market
Implementing the decisions and arrangements of the Party Central Committee and the State Council, the city adheres to the position that houses are for living and not for speculation, improving the “market+guarantee” housing supply system, constructing a new model of real estate development to better meet residents' rigid housing needs and diversified and improved housing needs, and promote the steady and healthy development of the real estate market. On May 27, four departments including the Municipal Housing, Urban-Rural Development Administration, the Municipal Housing Administration, the Municipal Planning and Resources Bureau, and the Municipal Taxation Bureau jointly issued the “Notice on Optimizing Policies and Measures to Optimize the Stable and Healthy Development of the City's Real Estate Market” (hereinafter referred to as the “Notice”), proposing nine policies and measures to adjust and optimize housing purchase restrictions, support the reasonable housing needs of families with many children, optimize housing credit policies, support “trade-in”, and optimize land and housing supply. The “Notice” will come into effect on May 28, 2024.
I. Main contents of the “Notice”
The “Notice” clearly adjusts and optimizes housing purchase restriction policies. The first is to optimize housing purchase conditions for non-Shanghai residents. Shorten the period for non-registered households and single people to pay social insurance or personal income tax when buying a home, and expand the area for buying a home. The second is to adjust the caliber of relevant policies. Lift restrictions on divorce purchases, adjust housing gift regulations, and support enterprises to buy small-sized second-hand housing for employees to rent.
The “Notice” emphasizes supporting the reasonable housing needs of families with many children. First, you can buy 1 additional housing unit. The second is to optimize the first housing certification criteria for families with many children in individual housing loans.
The “Notice” proposes to optimize housing credit policies. The first is to adjust and optimize personal housing credit policies in accordance with urban policy principles. The second is to further develop the role of personal loans from the Housing Provident Fund to support residents' reasonable housing needs, and moderately raise the maximum amount of personal loans from the Housing Provident Fund in the city.
The “Notice” proposes to support families who have difficulty living in order to improve their living conditions. Appropriate subsidy measures such as temporary rental, renovation and relocation have been adopted in stages to support “trade-in” housing for families with difficulty living, and promote the improvement of living conditions.
The “Notice” calls for optimizing the supply of land and housing. Give full play to the leading role of urban general regulations, rationally grasp the timing and development pace and structure of regional planning, focus on improving the efficiency of land resource allocation, and achieve high-quality and accurate land supply according to regional infrastructure, public facilities, industrial development, market demand, etc. Improve the real estate linkage mechanism, adjust and optimize the area standards and ratio requirements for small and medium housing units in a differentiated manner, support regional coordination and overall balance, and better promote the coordinated development of regional population, land and housing.
According to the provisions of the “Notice”, Shanghai will also establish and improve the housing security system, explore the acquisition and rental of suitable housing through state-owned platform companies and other entities to optimize housing security supply; accelerate urban renewal such as the “two old and one village” renovation to improve the living conditions and environmental quality of the masses through multiple channels; improve housing quality to support the construction of green, low-carbon, intelligent, and safe houses; and strengthen monitoring and supervision to maintain order in the real estate market.
II. Interpretation of specific policies
(1) Aspects of adjusting and optimizing housing purchase restriction policies
In order to meet reasonable housing needs, service personnel can settle down, promote work-residence balance, and differentiate and adjust and optimize housing purchase restriction policies across regions.
The first is to shorten the period of time required for non-Shanghai residents to pay social security or personal tax when buying a home. The social security or personal tax period required for non-Shanghai residents to purchase homes was adjusted from “5 years or more of continuous payment” to “3 years or more of continuous payment”; non-Shanghai talents in key regions such as Xincheng and North-South transformation were adjusted accordingly from “continuous payment of 3 years or more” to “2 years or more of continuous payment”, and “continuous payment for 1 year or more” in the Lingang New Area of the Free Trade Zone continued to implement the “continuous payment for 1 year or more” rule.
The second is to expand areas for non-Shanghai talents and non-Shanghai single people in key regions to buy homes. Based on promoting regional work-residence balance, the housing purchase area for non-Shanghai talents in key regions such as Xincheng and North-South transformation will be expanded to the entire region; the area for non-Shanghai single people to buy homes will be expanded to second-hand housing within the outer ring.
The third is to adjust the caliber of relevant policies. The requirement to calculate the number of housing units combined for divorced home purchases has been abolished. For couples who buy a house after divorce, the number of housing units owned by the family before the divorce is no longer calculated. Housing grant regulations have been adjusted, and housing that has already been gifted is no longer included in the number of housing units owned by the grantor.
Fourth, support enterprises to buy houses for employees to rent. For enterprises that purchase small-sized second-hand housing (meaning second-hand housing completed before 2000, with a construction area of 70 square meters or less) for employees to rent, there is no limit on the number of housing units purchased.
(2) Aspects of supporting the reasonable housing needs of families with many children
In order to meet the reasonable housing needs of families with many children, support measures have been taken in terms of housing purchase restrictions and credit.
The first is to buy 1 additional housing unit. For families with two or more children (including those with household registration in the city and households with residents not registered in the city), they can purchase 1 more housing unit on the basis of the implementation of the existing housing purchase restriction policy.
The second is to optimize the determination of the number of first housing units. Optimize the criteria for identifying the first home in individual housing loans for families with many children, and reduce the burden of interest on home purchases.
(3) Aspects of optimizing housing credit policies
In accordance with the policy principles of the city, adjust the city's policies relating to the issuance of new commercial personal housing loans:
First, the lower interest rate limit for the first housing commercial personal housing loan was adjusted to not lower than the market quoted interest rate (LPR) for the corresponding term loan reduced by 45 basis points (after adjustment, the lower interest rate limit for mortgages with a term of 5 years or more is currently 3.5%), and the minimum down payment ratio was adjusted to no less than 20%.
Second, the lower interest rate limit for commercial personal housing loans for two housing units was adjusted to not lower than the corresponding term loan market quoted interest rate (LPR) by 5 basis points (after adjustment, the lower interest rate limit for mortgages with a term of 5 years or more is currently 3.9%), and the minimum down payment ratio was adjusted to not less than 35%; the Lingang New Area of the Free Trade Zone and the six administrative districts of Jiading, Qingpu, Songjiang, Fengxian, Baoshan, and Jinshan continued to implement differentiated policies. The corresponding lower interest rate limit for commercial personal housing loans for two housing units was reduced by 25 basis points (LPR) Basis point (after adjustment, houses with a term of 5 years or more) The minimum loan interest rate is currently 3.7%), and the minimum down payment ratio has been adjusted to no less than 30%.
Banking financial institutions reasonably determine the specific down payment ratio and interest rate level for each loan in accordance with the requirements, taking into account factors such as the institution's business conditions and customer risk situation. For specific loan services, please contact the managing bank.
(4) Aspects of optimizing personal loan policies for housing provident funds
Further develop the role of housing provident fund personal loans in supporting residents' reasonable housing needs, and optimize housing provident fund personal loan policies.
The first is to increase the loan amount. For employees who purchased their first home, the maximum loan amount for personal provident funds (including supplementary provident funds) was adjusted to 800,000 yuan, and the maximum loan amount for family provident funds (including supplementary provident funds) was adjusted to 1.6 million yuan. For families with many children, the maximum loan amount is increased by 20% on this basis, and the policy remains unchanged, that is, it can reach up to 1.92 million yuan. For workers who purchased a second upgraded housing unit, the maximum loan amount for personal provident funds (including supplementary provident funds) was adjusted to 650,000 yuan, and the maximum loan amount for family provident funds (including supplementary provident funds) was adjusted to 1.3 million yuan.
The second is to reduce the down payment ratio. For those applying for an Provident Fund loan to purchase their first home, the minimum down payment ratio will be adjusted to 20%; for those applying for an Provident Fund loan to purchase a second upgraded home, the minimum down payment ratio will be adjusted to 35%; for the housing purchased in the Lingang New Area of the Free Trade Zone and the six administrative districts of Jiading, Qingpu, Songjiang, Fengxian, Baoshan and Jinshan, the minimum down payment ratio will be adjusted to 30%.
(5) Aspects of supporting families with housing difficulties to improve their living conditions
In order to support families with housing difficulties to improve their living conditions, eligible families of “trade-in” residents are given moderate allowances for transient rent, renovation, and moving during the housing replacement period.
The first is the target of the subsidy. From the date of implementation of the “Notice”, families of residents who sell their only housing completed before 2000 and with a construction area of 70 square meters or less within the Outer Ring Road and buy first-hand housing outside the Outer Ring Road can apply for a subsidy from the district real estate exchange center where they have purchased first-hand housing.
The second is the subsidy standard. A tiered fixed subsidy is applied according to the floor area of the sold housing. For those with a construction area of 30 square meters or less, the subsidy standard is 20,000 yuan for each unit; for housing with a floor area of 30 to 50 square meters, the subsidy standard is 25,000 yuan per unit; for housing with a floor area of 50 to 70 square meters, the subsidy standard is 30,000 yuan per unit. You will receive a subsidy after applying for a real estate title certificate for the purchase of a new first-hand home.
The city will adhere to city-specific policies, adapt to new changes in the relationship between supply and demand in the real estate market, meet people's new expectations for high-quality housing, coordinate stock and growth, market and guarantee, take more measures to maintain the smooth operation of the real estate market, promote the construction of a new model of real estate development, and promote high-quality real estate development.
Editor/jayden