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Shanghai plays fair hand on homes
By Cao Qian |
December 31, 2009, Thursday
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Print Edition
Print Edition
SHANGHAI would continue to offer home-purchase loan and tax initiatives for end-users and people who buy second houses to improve their living conditions, the city government said yesterday.
At the same time, it said, the commitment to curb speculation and hoarding was firmly entrenched.
From tomorrow, anyone who sells his or her only and self-use house after owning it for five years will be exempt from individual income tax.
The previous waiting period was two years and the tax rate remains unchanged - 1 percent of the total sale price for ordinary housing and 2 percent for others.
Also effective tomorrow, only first-time buyers who purchase homes defined as ordinary housing of no larger than 90 square meters will be able to enjoy a preferential 1 percent deed tax, compared to the standard 1.5 percent rate.
However, to enjoy the 1 percent rate, buyers must present a certificate issued by the city's real estate trading center to prove they're genuine first-time buyers, the government said.
From the bank side, preferential loan policies - a minimum 20 percent down payment and a 30 percent discount in interest rates - will remain available to first-time buyers who purchase dwellings defined as ordinary housing.
But second-time buyers who purchase ordinary houses to improve their living conditions, starting tomorrow, must present a certificate that their current per capita space is below the city's average level to qualify for preferential loans.
The city government said it would strictly implement a new policy announced last week by the central government stating that the resale lock-up period for property will return to the original time limit starting tomorrow.
The Ministry of Finance and the State Administration of Taxation detailed the new policy in a joint announcement that a 5.5 percent tax would only apply if people sold their homes, defined as ordinary housing, five years after purchase. Previously, the waiting period was two years.
For ordinary homes purchased for more than two years but less than five years, people will be required to pay the tax only on the profit.
For non-ordinary homes purchased for more than two years but less than five years, a 5.5 percent tax will be levied on the total sales price starting tomorrow. Previously, the tax was only charged on the profit.
"The local policies came as no surprise to us as they showed the same mild tone we've felt from the policy introduced earlier by the central government," said Ma Ji, a senior manager with the research department at Shanghai Centaline Property Consultants Ltd, operator of the city's largest estate agency.
"All the new policies are designed to curb speculation while home purchases by end-users remain encouraged."
Industry analysts said the local measures may help cool down the market. But they said no major effect was expected to be felt before the Spring Festival holiday that falls in mid-February.
Periods before and after the week-long holiday are traditionally quiet on the home front.
Soaring housing prices across the country have been reducing home buyers' accessibility.
In Shanghai, the price of existing homes has climbed by an average 38 percent this year and about 45 percent of new home projects have gained more than 30 percent in price, according to industry research.
At the same time, it said, the commitment to curb speculation and hoarding was firmly entrenched.
From tomorrow, anyone who sells his or her only and self-use house after owning it for five years will be exempt from individual income tax.
The previous waiting period was two years and the tax rate remains unchanged - 1 percent of the total sale price for ordinary housing and 2 percent for others.
Also effective tomorrow, only first-time buyers who purchase homes defined as ordinary housing of no larger than 90 square meters will be able to enjoy a preferential 1 percent deed tax, compared to the standard 1.5 percent rate.
However, to enjoy the 1 percent rate, buyers must present a certificate issued by the city's real estate trading center to prove they're genuine first-time buyers, the government said.
From the bank side, preferential loan policies - a minimum 20 percent down payment and a 30 percent discount in interest rates - will remain available to first-time buyers who purchase dwellings defined as ordinary housing.
But second-time buyers who purchase ordinary houses to improve their living conditions, starting tomorrow, must present a certificate that their current per capita space is below the city's average level to qualify for preferential loans.
The city government said it would strictly implement a new policy announced last week by the central government stating that the resale lock-up period for property will return to the original time limit starting tomorrow.
The Ministry of Finance and the State Administration of Taxation detailed the new policy in a joint announcement that a 5.5 percent tax would only apply if people sold their homes, defined as ordinary housing, five years after purchase. Previously, the waiting period was two years.
For ordinary homes purchased for more than two years but less than five years, people will be required to pay the tax only on the profit.
For non-ordinary homes purchased for more than two years but less than five years, a 5.5 percent tax will be levied on the total sales price starting tomorrow. Previously, the tax was only charged on the profit.
"The local policies came as no surprise to us as they showed the same mild tone we've felt from the policy introduced earlier by the central government," said Ma Ji, a senior manager with the research department at Shanghai Centaline Property Consultants Ltd, operator of the city's largest estate agency.
"All the new policies are designed to curb speculation while home purchases by end-users remain encouraged."
Industry analysts said the local measures may help cool down the market. But they said no major effect was expected to be felt before the Spring Festival holiday that falls in mid-February.
Periods before and after the week-long holiday are traditionally quiet on the home front.
Soaring housing prices across the country have been reducing home buyers' accessibility.
In Shanghai, the price of existing homes has climbed by an average 38 percent this year and about 45 percent of new home projects have gained more than 30 percent in price, according to industry research.
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