Previously, the Ministry of Finance, the State Taxation Administration, and the Ministry of Housing and Urban-Rural Development jointly issued a notice regarding the housing transaction deed tax policy and related regulations on the cancellation of the ordinary residence and non-ordinary residence standards in relevant cities, as well as policies on land value-added tax and value-added tax. It was pointed out that in peking, shanghai, guangdong, and shenzhen, the cancellation of these standards will result in a unified individual sales tax policy for residential properties applicable throughout the country, exempting individuals from value-added tax when selling properties purchased for more than two years (including two years). For properties purchased for less than two years, a value-added tax will be levied at a rate of 5%.

Regarding the deed tax, according to the announcement, individuals purchasing a family's only residence (which includes the buyer, spouse, and underage children) with an area of 140 square meters or less will be taxed at a reduced rate of 1%; for areas exceeding 140 square meters, a reduced rate of 1.5% will apply. For individuals buying a second residence for the family, the tax for properties of 140 square meters or less will be reduced to 1%, and for properties exceeding 140 square meters, a reduced rate of 2% applies.

Previously, peking, shanghai, and shenzhen successively issued notices regarding the cancellation of the ordinary residence standard, clearly abolishing the definitions of ordinary and non-ordinary residences and optimizing the related tax policies, which also underwent significant adjustments.

Li Yujia, chief researcher at the Housing Policy Research Center of the Guangdong Provincial Urban Planning Institute, stated that during the past era of 'housing scarcity,' it was necessary to maximize housing supply, leading to the concepts of ordinary and non-ordinary residences, as well as differentiated tax policies. Currently, significant changes have occurred in the supply-demand relationship of real estate, with considerable downward pressure in the market and hindered transaction cycles; differentiated taxation not only loses its meaningful existence but also obstructs transaction circulation and market stabilization.

Chen Wenjing, policy research director at the China Index Institute, stated that this tax policy will have a substantial bullish impact on both homebuyers and real estate companies, lowering the cost of home purchases for buyers and alleviating financial pressure on property companies, which is conducive to further stabilizing market expectations and boosting buyers' confidence in housing purchases. In October, the real estate market showed signs of "phase stabilization," and the continuous implementation of fiscal and tax policies is expected to further strengthen the pace of market recovery, helping the real estate market to stop its decline and stabilize.

Jiang Xianliang, managing director of Midland Realty in shenzhen, stated that recently, first-tier cities have successively canceled the ordinary and non-ordinary residence standards, leading to an increase in the sales of larger units and mid-to-high-end products, with many transactions accelerating towards signing. Some clients, wanting to save on transaction taxes, choose to submit their transfer applications after December 1st, so the number of transfers will return to normal after December. Jiang believes that after the optimization of transaction taxes and fees, the transaction volume of improvement-type and high-end products will noticeably increase, and, combined with various optimization measures taken this year, the real estate market has gained unprecedented momentum.

Editor/Lambor