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China Set To Reduce Home Sales Tax

by Mary Swire, Tax-News.com, Hong Kong

19 December 2008


The Chinese government has unveiled a set of tax incentives aimed at reversing the current slowdown in the country's housing market.

Announcing the news via a notice on its website on December 18, the government stated that it was poised to introduce several tax measures which will make property transactions a much quicker and easier process for Chinese individuals.

Explaining how the measures work, the notice stated that the government will decrease the amount of time individuals have to wait for exemption from sales tax on a property from five years down to two.

For those who are selling a house less than two years after its purchase, tax will only be payable on the profit realised from the sale of the house, not on the total sale price.

This isn't the first time the government has tried to stimulate the property market, as earlier this year it introduced a host of fiscal incentives for first-time buyers.

The new measures will not, however, alter the current 5% tax rate on home sales, and will only be brought in for one year.

The government recently revealed that for the first ten months of this year, property sales had declined by almost 20%.


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