According to Zhito Finance APP, on November 13, the Ministry of Finance and other three departments issued a notice about tax policies to promote the stable and healthy development of the real estate market. For individuals purchasing their only family residence with an area of 140 square meters or less, a deed tax rate of 1% will be applied; for areas exceeding 140 square meters, a reduced rate of 1.5% will apply. For individuals purchasing a second family residence with an area of 140 square meters or less, a deed tax rate of 1% will be applied; for areas exceeding 140 square meters, a rate of 2% will be applied.

In cities that have canceled the standards for ordinary residences and non-ordinary residences, taxpayers constructing and selling ordinary standard residences, with the appreciation amount not exceeding 20% of the deductible project amount, will continue to be exempt from land appreciation tax. In Beijing, Shanghai, Guangzhou, and Shenzhen, where the standards have been canceled, the same personal sales housing value-added tax policy applicable to other regions in the country will be implemented. Individuals selling housing purchased for more than two years (including two years) will be exempt from value-added tax.

When officials from the Ministry of Finance, the State Administration of Taxation, and the Ministry of Housing and Urban-Rural Development answered reporters' questions about tax policies to promote the stable and healthy development of the real estate market, it was stated that this adjustment would unify the lower limit of the advance land appreciation tax rate across regions by reducing it by 0.5 percentage points. After adjustment, the rate will be 1.5% in the eastern regions, 1% in the central and northeastern regions, and 0.5% in the western regions.

The full text is as follows:

Notice on tax policies to promote the stable and healthy development of the real estate market.

To promote the stable and healthy development of the real estate market, the relevant tax policies are announced as follows:

1. About the housing transaction deed tax policy.

(1) For individuals purchasing their only family residence (the range of family members includes the purchaser, spouse, and minor children), a deed tax will be levied at a reduced rate of 1% for areas of 140 square meters or less; for areas above 140 square meters, the deed tax will be levied at a reduced rate of 1.5%.

(2) For individuals purchasing a second set of housing for the family, a deed tax will be levied at a reduced rate of 1% for areas of 140 square meters or less; for areas above 140 square meters, the deed tax will be levied at a reduced rate of 2%.

A second set of housing for the family refers to the second residence purchased by a family that already owns one housing unit.

(3) Taxpayers applying for tax incentives should submit proof of family member information to the competent tax authority and a written inquiry result regarding the family's housing situation issued by the real estate management department where the property is located. If information sharing conditions are met, the taxpayer may authorize the competent tax authority to obtain relevant information through information sharing; if information sharing conditions are not met, and the taxpayer cannot submit relevant proof materials, the taxpayer may handle it according to the regulations by applying for the notification commitment system, submitting the corresponding "Tax Proof Matter Notification Commitment Letter," and assuming legal responsibility for the truthfulness of the commitment.

(4) Specific operational measures will be formulated by the finance, taxation, and real estate management departments of each province, autonomous region, and municipality directly under the central government.

2. Regarding the relevant land value-added tax and value-added tax policies after the cancellation of ordinary and non-ordinary residential standards in relevant cities.

(1) In cities that have canceled the standards for ordinary and non-ordinary residential properties, according to Article 8, Item 1 of the "Interim Regulations on the Land Value-Added Tax of the People's Republic of China," if the taxpayer constructs ordinary standard residential units for sale and the increase in value does not exceed 20% of the deducted item amount, the land value-added tax will continue to be exempt.

According to Article 11 of the "Implementation Rules of the Interim Regulations on the Land Value-Added Tax of the People's Republic of China," the specific implementation standards for relevant cities are prescribed by the people's governments of each province, autonomous region, and municipality directly under the central government. After the specific implementation standards are announced, the tax authority will execute the newly accepted settlement declaration projects according to the newly announced standards, as well as projects that were accepted before the announcement but did not issue settlement review conclusions. Projects with settlement review conclusions issued before the announcement will continue to be executed according to the original standards.

2. In the cities of peking, shanghai, guangzhou, and shenzhen, where the standards for ordinary residences and non-ordinary residences are canceled, the unified individual sales housing value-added tax policy applicable to other regions in the country will be implemented after the cancellation of these standards. Personal sales of housing purchased for more than two years (including two years) in these cities will be exempt from value-added tax. The related contents of Article 5, Paragraph 1 and Paragraph 2 of the "Notice of the Ministry of Finance and the State Administration of Taxation on Fully Launching the Pilot Program for the Transition from Business Tax to Value-Added Tax" (Cai Shui [2016] No. 36) and the "Transitional Policy Provisions for the Pilot Program of Transition from Business Tax to Value-Added Tax" will cease to be enforced.

3. This announcement will take effect on December 1, 2024. The "Notice of the Ministry of Finance, the State Administration of Taxation, and the Ministry of Housing and Urban-Rural Development on Adjusting the Business Tax and Deed Tax Preferential Policies in Real Estate Transactions" (Cai Shui [2016] No. 23) will be repealed simultaneously. Before December 1, 2024, individuals selling and purchasing housing who have not yet reported and paid value-added tax and deed tax related to this will be able to execute according to the provisions of this announcement.

Officials from the Ministry of Finance, State Administration of Taxation, and the Ministry of Housing and Urban-Rural Development answered reporters' questions regarding tax policies to promote the stable and healthy development of the real estate market.

In order to implement the decisions and deployments of the Party Central Committee and the State Council and to promote the stable and healthy development of the real estate market, recently, the Ministry of Finance, the State Administration of Taxation, and the Ministry of Housing and Urban-Rural Development issued the "Announcement on Tax Policies to Promote the Stable and Healthy Development of the Real Estate Market." The State Administration of Taxation issued the "Announcement on Reducing the Lower Limit of Pre-collection Rate for Land Value Increment Tax," which will take effect from December 1, 2024. The relevant officials from the Department of Taxation Policy of the Ministry of Finance, the Property and Behavioral Taxation Department of the State Administration of Taxation, the Goods and Services Tax Department, and the Real Estate Market Supervision Department of the Ministry of Housing and Urban-Rural Development answered reporters' questions.

1. What is the main background for this adjustment in the real estate market tax policy?

Answer: The Party Central Committee attaches great importance to the stable and healthy development of the real estate market. The third plenary session of the 20th Central Committee proposed allowing relevant cities to cancel the standards for ordinary residences and non-ordinary residences and improve the real estate tax system. The Political Bureau of the Central Committee emphasized promoting the stabilization and recovery of the real estate market, urgently improving policies on land, finance and taxation, and financial matters, to promote the establishment of a new model for real estate development.

In order to implement the decisions of the Party Central Committee, it is necessary to clarify how to connect value-added tax and land value increment tax preferential policies related to the cancellation of the standards for ordinary residences and non-ordinary residences, and based on the current operation of the real estate market, further adjust and optimize related tax policies to enhance support and promote the stable and healthy development of the real estate market.

2. What adjustments have been made to the relevant tax policies in the real estate market?

Answer: (1) Increase the tax incentive for housing transaction环节契税, actively support residents' rigid and improved housing demands; reduce the lower limit of the land value increment tax pre-collection rate to alleviate the financial difficulties of real estate enterprises.

Regarding deed tax, the current area standard for enjoying the 1% low tax rate will be raised from 90 square meters to 140 square meters, and it will be clarified that peking, shanghai, guangzhou, and shenzhen can uniformly apply the deed tax incentive policy for families' second residences, meaning that after adjustment, nationwide, for individuals purchasing their only home and their second home, as long as the area does not exceed 140 square meters, the deed tax will be uniformly charged at a rate of 1%.

In terms of land value increment tax, the lower limit of the pre-collection rate will be uniformly reduced by 0.5 percentage points in all regions. Each area may adjust the actual execution of the pre-collection rate based on local circumstances.

(2) Clarify and cancel value-added tax and land value increment tax preferential policies related to the standards of ordinary residences and non-ordinary residences, reduce the transaction costs of second-hand houses, and maintain the stability of tax burdens for real estate enterprises.

Regarding value-added tax, after the cancellation of ordinary and non-ordinary residence standards in relevant cities, individuals selling houses purchased for over 2 years (including 2 years) will be exempt from value-added tax, and the original provision of levying value-added tax on individuals selling non-ordinary housing purchased for more than 2 years in peking, shanghai, guangzhou, and shenzhen will accordingly cease to be enforced.

In terms of land value increment tax, in cities where the standards for ordinary and non-ordinary residences have been canceled, for taxpayers constructing ordinary standard residences where the selling value increment does not exceed 20% of the deductible project amount, the exemption policy for land value increment tax will continue to be implemented.

3. What are the main contents of the adjusted deed tax incentive policy for housing transactions? How can taxpayers apply for the incentive policy?

Answer: (1) Policy content. For individuals purchasing their only family residence (the family members include the buyer, spouse, and underage children, the same below), if the area is 140 square meters or less, a deed tax will be levied at a reduced rate of 1%; if the area exceeds 140 square meters, a deed tax will be levied at a reduced rate of 1.5%.

For individuals purchasing a second family home, those with an area of 140 square meters or less will be subject to a deed tax rate of 1%; those with an area exceeding 140 square meters will be subject to a deed tax rate of 2%. A second family home refers to a home purchased by a family that already owns one.

2. Handling Method. Taxpayers applying for tax benefits must submit proof of family member information to the competent tax authority and the written inquiry results regarding the taxpayer's family housing situation issued by the local real estate management department. If information sharing conditions are met, the taxpayer may authorize the competent tax authority to obtain relevant information through information sharing; if information sharing conditions are not met and the taxpayer cannot provide relevant proof materials, the taxpayer may proceed according to the informed commitment system, submitting the corresponding "Tax Certificate Matters Informed Commitment Letter" and assuming legal responsibility for the authenticity of the commitment.

Specific operational measures will be developed by the financial, taxation, and real estate management departments of each province, autonomous region, and municipality directly under the central government.

To allow more taxpayers to benefit from the policy, for individuals purchasing housing and declaring payment of the deed tax after December 1, 2024, as well as those who purchased housing before December 1, 2024, but declare and pay the deed tax after December 1, 2024, all can implement according to the newly published announcement if they meet the regulations of the new announcement.

4. What are the main contents of the value-added tax preferential policies related to the cancellation of the ordinary residence and non-ordinary residence standards?

Answer: In Beijing, Shanghai, Guangzhou, and Shenzhen, wherever the ordinary residence and non-ordinary residence standards are canceled, after the cancellation of these standards, a unified personal sales housing value-added tax policy applicable to other regions nationwide will be implemented. For individuals in that city selling housing purchased for more than two years (including two years), they will be exempt from value-added tax.

The "Notice of the Ministry of Finance and the State Administration of Taxation on the Comprehensive Pilot Program for the Transition from Business Tax to Value-Added Tax" (Cai Shui [2016] No. 36) Attachment 3 "Regulations on Transition Policies for the Business Tax to Value-Added Tax Pilot" Article 5 paragraph 1 and the corresponding content of paragraph 2 will be suspended.

Before December 1, 2024, for value-added tax related to individual housing sales that have not been declared and paid, those that meet the newly published announcement can be implemented according to the newly published announcement.

What are the main contents of the land value-added tax preferential policies in connection with the cancellation of the ordinary residence and non-ordinary residence standards?

Answer: In cities that have canceled the ordinary residence and non-ordinary residence standards, according to Article 8, Item 1 of the Interim Regulations on Land Value-Added Tax of the People's Republic of China, taxpayers who build and sell ordinary standard residences will continue to be exempt from land value-added tax if the increase in value does not exceed 20% of the deducted project amount.

According to Article 11 of the Implementation Rules of the Provisional Regulations of the People's Republic of China on Real Estate Tax, the specific implementation standards for cities are stipulated by the people's governments of provinces, autonomous regions, and municipalities directly under the Central Government. After the specific implementation standards are announced, tax authorities shall implement the newly announced standards for projects newly accepted for settlement declaration, as well as for projects that have been accepted for settlement declaration before the specific implementation standards are announced but have not yet issued settlement review conclusions. Projects for which settlement review conclusions were issued before the specific implementation standards were announced shall continue to be implemented according to the original standards.

What are the main contents of lowering the lower limit of the pre-collection rate of land value-added tax?

Answer: In line with China's real estate development model, the land value-added tax implements a pre-collection system. In order to fully exert the adjustment function of the pre-collection of land value-added tax, the State Administration of Taxation issued a document in 2010 clarifying the lower limits of pre-collection rates in various regions, where the eastern region is 2%, the central and northeastern regions are 1.5%, and the western region is 1%.

This adjustment uniformly lowers the lower limit of the land value-added tax pre-collection rate in various regions by 0.5 percentage points. After the adjustment, the eastern region will be 1.5%, the central and northeastern regions will be 1%, and the western region will be 0.5%.

What measures will tax authorities take to facilitate taxpayers in enjoying relevant preferential policies?

Answer: In order to ensure that taxpayers can promptly enjoy the benefits of tax preferential policies, tax authorities will work with relevant departments to take a series of measures to continuously optimize tax payment services and improve taxpayer satisfaction and sense of gain.

First, further improve the efficiency of window services. After the announcement, local tax authorities will rely on the "one-stop service" model of handling property registration and tax payment, further optimizing offline window settings and online operation processes, providing homebuyers with a "one-stop" service for tax payment and certificate processing in one go. In addition, tax authorities will also consider adding service windows or extending tax payment hours as needed to provide tax services for those who require them.

Second, further optimize the method of providing materials. Continuously increase the efforts for departmental collaboration and information sharing, using shared information to pre-fill data and reduce the burden on taxpayers in providing and reporting their information. For those who do not meet the conditions for information sharing and cannot submit relevant proof materials, taxpayers may choose to process according to the applicable informed commitment system as per current regulations.

Third, further strengthen policy publicity and interpretation. Local tax authorities will collaborate with relevant departments based on local conditions to provide professional policy content interpretation and tax processing procedure consulting services through tax service hall tax guidance posts and the dedicated 12366 tax payment hotline, quickly addressing taxpayer concerns to ensure orderly tax processing. At the same time, utilize various media to carry out policy publicity and interpretation, creating a favorable tax business environment.

This article is compiled from the "Ministry of Finance official website"; edited by Zhitong Finance: Huang Xiaodong.