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Tax breaks on home purchases made clear
By Cao Qian |
April 1, 2010, Thursday
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Print Edition
Print Edition
IN a further bid to steady China's racing property market, the definition of "first-home buyers" eligible for a preferential purchase tax was clarified at state level yesterday.
Only genuine first-timers who buy homes defined as "ordinary housing of no larger than 90 square meters" will receive cuts in deed taxes, the Ministry of Finance and the State Administration of Taxation said in a joint statement.
The deed-tax rate varies from city to city in China.
In Shanghai, a 1-percent rate on ordinary home purchases for first-time buyers has applied since the start of this year, while the standard rate is 1.5 percent.
Buyers receive the rate if they have a certificate from the city's real estate trading center saying they're genuine first-timers.
In Shanghai, those listed as a joint buyer for parents' homes but who have never purchased their own qualify for the preferential rate.
However, according to the clarification posted yesterday on the ministry's Website, these buyers do not qualify.
"The latest tightening measures on the deed tax will likely have a moderate, rather than significant, impact on the city's housing market mainly due to the rather small 0.5-percentage-point gap," said Ma Ji, a research manager at Shanghai Centaline Property Consultants Ltd.
"The stricter deed-tax guidelines again show the central government's determination to cool down the overheated housing market."
In Shanghai, new property transactions rose above the 1,000-unit mark for the fourth consecutive day yesterday as the market started to pick up strength amid increased supply.
As of 8pm yesterday, 1,141 units of new properties, mainly houses, were sold across the city, extending a spree that began on Sunday when 1,325 new units changed hands, according to www.fangdi.com.cn, the city's official Website tracking property deals.
On Monday, daily transaction volume of new properties surged to 1,801 units in Shanghai, the highest level in 31 months. On Tuesday, the number fell to 1,032 units.
"Many real estate developers started to launch their projects onto the market in bigger volumes since the second half of March as demand from buyers is recovering," said Xue Jianxiong, an analyst at China Real Estate Information Corporation, a property information, consulting and online services provider.
Supply of new homes, excluding those designated for relocated residents under urban redevelopment plans, surged to 208,000 square meters and 370,000 square meters in the city during the third and fourth week of March.
This compares to 39,000 square meters and 54,000 square meters in the first and second week, according to Shanghai Uwin Real Estate Information Services Co.
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