WITH the implementation of the latest package of tax incentives on Dec. 1, home-buying costs have been reduced, which has unlocked housing demand even more. Many Chinese cities saw a surge in property viewings over the past week, leading to continued stabilization of the real estate market.
The biggest beneficiaries of the new tax policies are customers who wish to upgrade their housing. Property viewings surged by around 30 percent over the past week, showing a noticeable uptick, a sales agent surnamed Zhu in Hangzhou told the Global Times on Monday.
Another agent based in Beijing said “so far in December, both property viewings and transaction volumes have been better than last month.”
“Prices have also seen a rebound, especially for upgraded housing, which has had a notable increase,” the agent said.
“Since the new policy was implemented, we’ve seen a general month-on-month increase in housing search activities across cities of all tiers,” said Wei Xie, chief research officer of 58 Anjuke Institute.
Among a series of policies launched to support the housing market over recent months, the Ministry of Finance, along with the State Taxation Administration (STA) and the Ministry of Housing and Urban-Rural Development, rolled out pro-housing tax policies on Nov. 13, lowering the deed taxes to 1 percent for purchases of first homes and second homes under 140 square meters.
Starting from Dec. 1, the deed tax, value-added tax and individual income tax on first and second home transactions have been reduced to varying degrees. As long as the taxes have not been declared or paid, and the property certificates have not been issued, the new rules will apply.
From Dec. 1 to 5, a total of 364,000 households declared eligibility for the preferential deed tax policies, resulting in a total reduction of 8.4 billion yuan ($1.16 billion), with an average tax saving of 23,000 yuan per household, STA data showed.
The policy has further released pent-up housing demand. A total of 553,000 housing transactions were reported nationwide, a 24.8-percent year-on-year increase.
The effect is especially evident in first-tier cities. In Beijing, transactions grew by 62.2 percent, in Shanghai by 87.2 percent, in Guangzhou by 27.5 percent and in Shenzhen by 66.4 percent.
A rapid growth in tax data, aside from the factor of taxpayers making concentrated tax payments following the new policy, reflects a recent rebound in the real estate market, driven by a combination of favorable policies, said STA official Huang Lixin.
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