The Ministry of Finance of China and three other departments: For the purchase of a family's only and second home not exceeding 140 square meters, a deed tax of 1% shall be paid

This article is sourced from the Ministry of Finance of China

Announcement on Tax Policies to Promote the Stable and Healthy Development of the Real Estate Market

Announcement No. 16 of 2024 by the Ministry of Finance, State Administration of Taxation, and Ministry of Housing and Urban-Rural Development

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

I. Regarding the Housing Transaction Deed Tax Policy

(1) For individuals purchasing their only family home (the family members include the buyer, spouse, and minor children, the same below), if the area is 140 square meters or less, the deed tax will be levied at a reduced rate of 1%; if the area is more than 140 square meters, the deed tax will be levied at a reduced rate of 1.5%.

(2) For individuals purchasing a second family home, if the area is 140 square meters or less, the deed tax will be levied at a reduced rate of 1%; if the area is more than 140 square meters, the deed tax will be levied at a reduced rate of 2%.

A second family home refers to the second home purchased by a family that already owns one home.

(3) Taxpayers applying for tax incentives must submit proof of family member information to the competent tax authority and a written inquiry result regarding the taxpayer's family housing situation issued by the real estate management department at the location of the purchase.

If the conditions for information sharing are met, taxpayers may authorize the competent tax authority to obtain relevant information through information sharing; if the conditions for information sharing are not met, and the taxpayer cannot submit relevant proof materials, the taxpayer may apply for the notification commitment system as prescribed, submit the corresponding "Tax Certification Matters Notification Commitment Letter," and bear legal responsibility for the authenticity 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.

II. Regarding the Cancellation of Ordinary and Non-Ordinary Residential Standards in Certain Cities and Related Land Value Increment Tax and Value-Added Tax Policies

(1) In cities that have canceled the ordinary and non-ordinary residential standards, according to Article 8, Item 1 of the Interim Regulations on Land Value Increment Tax of the People's Republic of China, taxpayers selling ordinary standard residential properties with an appreciation amount not exceeding 20% of the deductible project amount will continue to be exempt from land value increment tax.

According to Article 11 of the Implementation Rules of the Interim Regulations on Land Value Increment Tax, the specific execution standards for relevant cities will be determined by the people's governments of each province, autonomous region, and municipality directly under the central government.

After the specific execution standards are announced, projects newly accepted for settlement declaration by the tax authority, as well as projects that were accepted for settlement declaration before the announcement of the specific execution standards but have not yet issued a settlement review conclusion, will be executed according to the newly announced standards. Projects that received a settlement review conclusion before the announcement of the specific execution standards will continue to be executed according to the original standards.

(2) In Beijing, Shanghai, Guangzhou, and Shenzhen, where the ordinary and non-ordinary residential standards have been canceled, after the cancellation of these standards, a unified personal sales housing value-added tax policy applicable to other regions across the country will be implemented. For individuals in these cities selling housing purchased for more than 2 years (including 2 years), they will be exempt from value-added tax.

The relevant content 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 Transformation of Business Tax to Value-Added Tax" (Cai Shui [2016] No. 36) Attachment 3 "Provisions on Transitional Policies for the Pilot Program of Business Tax to Value-Added Tax" will be correspondingly suspended 3. This announcement will take effect from December 1, 2024.

The "Notice from the Ministry of Finance, State Administration of Taxation, and Ministry of Housing and Urban-Rural Development on Adjusting the Tax Policies for Real Estate Transaction Links" (Cai Shui [2016] No. 23) is hereby abolished. Before December 1, 2024, individuals selling or purchasing housing who have not yet declared and paid value-added tax and deed tax may execute according to this announcement if they meet the provisions of this announcement.

This is hereby announced.

Ministry of Finance, State Administration of Taxation, Ministry of Housing and Urban-Rural Development

November 12, 2024