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China’s MoF cuts taxes on home transactions to help realty prices

A sales assistant talks to visitors in front of models of apartments at a real estate exhibition in Shenyang, Liaoning province April 17, 2014. China's real estate investment rose 16.8 percent in first three months of 2014 from a year earlier, and revenues from property sales dropped an annual 5.2 percent, the National Bureau of Statistics said on Wednesday. REUTERS/Stringer (CHINA - Tags: REAL ESTATE BUSINESS) CHINA OUT. NO COMMERCIAL OR EDITORIAL SALES IN CHINA - RTR3LM1B

London / Bloomberg

China’s Ministry of Finance said it will cut taxes on home transactions as it steps up support for the property
market, after the central
government eased mortgage down payment requirements to the lowest level ever
earlier this month.
China will set the deed tax at 1.5 percent of the home’s value for first residences bigger than 90 square meters (969 square feet) and at 1 percent for those smaller than that size, the Ministry of Finance said in a statement on its website on Friday. Homeowners that live in cities other than the four first-tier ones including Beijing, Shanghai and Shenzhen will also be exempt from paying a business tax on properties sold after two years of purchase.
The deed tax will be cut to 2 percent for second homes bigger than 90 square meters and 1 percent for smaller residences, according to the statement. The eased deed tax requirements for second homes will exclude buyers in the four first-tier cities. The new rules will be effective as of Feb. 22.
China’s central bank on Feb. 2 said it will allow banks to cut the minimum required mortgage down payment to 20 percent from 25 percent for first-home purchases in areas without purchase restrictions, while the minimum down payment for second-home purchases was cut to 30 percent from 40 percent.
China’s politburo, the top decision-making body of the Communist Party, in early December vowed to reduce home inventory as one of its key tasks in 2016, the official Xinhua News Agency reported.

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