China: Updated tax policies on residential properties, tax refund for property reinvestment
Sales of residential property held for at least two years in Beijing, Shanghai, Guangzhou, and Shenzhen will be exempt from VAT
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January 7, 2025
Beginning December 1, 2024, updated tax policies on residential properties in China include:
- Deed Tax (DT, China’s statutory DT rate is 3%-5%)
- For individual purchasing a family home, 1% for properties under 140m², 1.5% if over 140m²
- For families buying a second home, 1% for properties under 140m², 2% if over 140m²
- Land Appreciation Tax (LAT) and value added tax (VAT) for cities that no longer differentiate between ordinary and luxury properties
- Continuance of the existing policy that ordinary residential property developers are exempt from LAT if the value appreciation is below 20% of the deductible amount specified in Article 11 of the LAT regulations
- Sales of residential property held for at least two years in Beijing, Shanghai, Guangzhou, and Shenzhen will be exempt from VAT, aligning these cities with existing policies in the rest of China
In addition, newly announced fiscal stimulus measures include tax reduction policies for real estate, such as a tax refund for property reinvestment.