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.