(Dec 30): China will extend a policy scrapping value-added tax on certain home sales in a move aimed at easing the country’s persistent property slump.
The exemption — which applies to individuals selling residential properties they have owned for at least two years — will be implemented from Friday, the country’s Ministry of Finance said in a statement Tuesday. A 3% VAT remains for homes sold within two years of purchase.
In cities including Shanghai, sellers of homes held for less than two years previously had to pay VAT of 5%.
The country’s major cities already implemented a VAT exemption in late 2024.
The move comes amid a prolonged real estate market crisis that has toppled major property developers including China Evergrande Group. China Vanke Co, the last big survivor still standing, is also facing rising debt woes as home prices saw their steepest decline in a year in October.
Chinese leaders have vowed to increase policy support for the housing market at a key economic meeting this month, including encouraging government acquisition of existing housing stock, primarily for use as affordable housing. But policymakers stopped short of the measures some economists think are needed to revive the sector such as cash subsidies for home buying and direct government investment.
See also: China unveils initial US$9 bil in consumer subsidies for 2026
Bloomberg reported in November that authorities were considering a range of measures to support the market, such as mortgage subsidies and tax rebates to encourage demand.
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