Beijing to reduce tax on larger house transactions

BEIJING - The Chinese capital Beijing will eliminate the distinction between ordinary and non-ordinary housing in an effort to reduce the tax burden during transactions of larger houses.

Non-ordinary properties that have been owned for two years or more will be exempted from a 5-percent value-added tax (VAT) during transactions, which means they will enjoy the same tax exemption as ordinary homes, according to a notice issued on Monday by the city government.

The removal of the distinction will take effect on Dec 1.

In Beijing, non-ordinary houses are defined as properties with building areas surpassing 144 square meters or transaction prices above certain levels depending on their locations.

China has rolled out a slew of measures to prop up the sluggish property market, including cutting mortgage rates, lowering down payment ratios and relaxing purchase restrictions.

Also on Monday, the metropolis of Shanghai announced a decision to scrap the distinction between ordinary and non-ordinary housing, subjecting the latter to reduced VAT and personal income taxes.

Amid the latest wave of pro-housing policies, China's property market displayed positive changes in October, with narrowing price declines, stronger sales and improved market sentiment.

The decline in the prices of commercial residential homes in China's 70 large and medium-sized cities generally moderated on a month-on-month basis in October, said the National Bureau of Statistics last Friday.