Beijing, Shanghai cut tax on larger house transactions to boost sales

Beijing and Shanghai authorities announced new measures on Monday that will lower transaction costs in the housing market with tax adjustments starting December 1.

The new policy changes, aimed at spurring demand and stabilizing the property market, will eliminate the distinction between "ordinary" and "non-ordinary" housing in an effort to reduce the tax burden during transactions of larger houses. 

In Beijing and Shanghai, "non-ordinary" houses are defined as properties with building areas surpassing 144 square meters, along with other requirements.

"The reduction in selling costs for homeowners is expected to boost listing and sales activity, which will increase the availability of high-quality second-hand properties. This, in turn, will provide homebuyers with more options and have a positive impact on the market," said Yan Yuejin, deputy director at E-House China R&D Institute.

Amid a sluggish property market, China has introduced a series of measures in taxation, finance, among others, to stimulate demand. On November 13, the Chinese authorities announced plans to enhance incentives in terms of deed tax, land appreciation tax and value-added tax to support steady and healthy development of the real estate sector.

(With input from Xinhua)