On 24 january, according to the network of officials of the people's government of chongqing city, the municipality of chongqing publicly issued the decision of the people's government of chongqing city on the revision of the provisional measures of the city of chongqing for the implementation of the reform of housing taxes on selected individual housings and the rules for the administration of the tax on individual housings in chongqing city, which are to be implemented from the date of publication。
The city of chongqing has decided to amend five articles of the provisional measures for the implementation of the reform of housing taxes on selected individual housing in the city of chongqing, which correspond to the rules for the administration of personal housing taxes in chongqing。
This is also another adjustment since last september's chongqing reordering of the individual housing property tax policy, which clearly excludes the introduction of a real estate tax on the first common home of the “three zeros”。
Public information indicates that chongqing has been the first city to pilot a property tax on individual housing since january 2011 and that it is one of the cities to pilot a property tax with shanghai。
In accordance with the chongqing housing tax policy, the chongqing property tax is levied within the administrative area of the main city in the 9th district of the city. The tax is imposed on a single commercial dwelling owned by the individual, on an individual's newly purchased top-class housing, and on a second and more general housing unit (including a second set) purchased at the same time in chongqing city by individuals with no domicile, no business and no job。
70% discount on tax on property
On this occasion, chongqing amended article 4, paragraph 1, of the chongqing city provisional scheme for the piloting of the housing tax reform for selected individual housings to read: “the tax value of taxable housing is the value of the property transaction. The property tax is temporarily paid at 70 per cent of the transaction price. When conditions are ripe, the value of the property is used as the basis for tax purposes.”
In the old policy, it was shown only that “the taxable value of the dwelling is the real estate transaction price”. This also means that, as of 1 january 2024, the taxable basis for the city's individual housing tax is adjusted from the “exchange price of the property” to 70 per cent of the transaction price of the property, and the taxable amount of the property tax is reduced directly by 70 per cent。
With regard to tax rates, chongqing adjusted the rate of 0. 5 per cent, 1 per cent and 1. 2 per cent of the three tranches applied to single commercial housing and high-end housing in different trading price zones to a flat 0. 5 per cent。
At the same time, in article 6, paragraph 1, the words “taxable amount = taxable area x unit price x tax rate for trade in construction area” were amended to read “taxable amount = taxable area x unit price x 70 per cent tax rate for trade in construction area”。
According to the case published by the zhongqing citizen king, who held the first taxable home of a family purchased in 2018 in the new regions of the two rivers, a real estate title had been issued in that year, with a 200 square metre floor area and a trade price of 3. 2 million yuan, at an original rate of 0. 5 per cent. Before and after the policy adjustment, wang was required to pay the personal housing tax on the house: the tax payable in 2024 after the policy adjustment = (200-180) x (3200000 ÷200) x 70 per cent x 0. 5 per cent = $1120. The tax payable for the year 2023 before the policy adjustment = (200-100) x (3200000 ÷ 200) x 0. 5 per cent = 8,000 yuan。
Increase in duty-free area to 180 square metres
On this occasion, chongqing also adjusted the area taxed on property. Chongqing amended article 6, paragraph 2, of the chongqing city interim scheme for the implementation of the housing tax reform pilot for selected individual housings to read “newly purchased single-commodity housing, high-end housing, 100 square metres free” to read “newly purchased single-commodity housing, high-end housing, 180 square metres free”。
At the same time, a paragraph has been added to article 7 as paragraph 4: “(iv) other cases where the municipality considers that tax relief or exemption is necessary.”
According to the old policy, the tax-free area of the single commercial dwelling owned by the taxpayer prior to the introduction of the scheme was 180 m2 and the tax-free area of 100 m2 of the newly acquired single commercial dwelling, high-end housing. In cases where the taxpayer's family owns a large number of newly purchased taxable housing units, the amount of taxable space is deducted in chronological order for the first-purchased taxable housing。
This also means that, as a result of the revision, chongqing uniformly adjusted the tax-free area for families who have purchased a new single-commodity home since the start of the pilot from 100 square metres to 180 square metres。
According to the case published by the zhongqing network, such as zhongqing zhang, who owns the first taxable home of a family purchased in 2017 in kowloon poe district, a real estate title certificate was issued that year, with 170 square metres of construction and a trade price of $3. 23 million at the original rate of 0. 5 per cent. Before and after the policy adjustment, a personal housing tax was paid for the house: the tax payable in 2024 after the policy adjustment was = zero. The tax payable for the year 2023 before the policy adjustment = (170-100) x (3. 23 million ÷170) x 0. 5 per cent = $6650。
Policy adjustments facilitate mobilization to improve group demand for housing
On the same day, the office of the chongqing leading group for the peaceful and healthy development of the real estate market issued a circular on further adjustments to optimizing real estate policy measures in order to better support residents' rigid and improved housing needs to meet the reasonable financing needs of real estate enterprises. Eight articles of the circular, including the introduction of subsidies for house purchases, support for the purchase of old and new homes, and optimization of the number of housing units for families with many children, better support for rigid and improved demand for sexual housing. It refers to the implementation of the policy of rejoicing the tax basis, tax rate and tax-free area adjustment for individual housing properties, as required by the municipal decree no. 367, which has been issued, and the deepening of the pilot reform of the individual housing property tax。
The senior analyst of the zhuge data research centre, guan yongxie, pointed out that, in the light of the new deal's orientation and impact, the revitalization of the policy to optimize the collection of property taxes was a clear de-coupling exercise that sent a strong signal of interest. Among them, the reduction of tax rates on property is undoubtedly a good initiative for home buyers, which has effectively reduced the cost of buying housing, has a clear negative effect and has facilitated the release of housing needs; at the same time, the exemption of high-end housing to 180 square metres has meant that a large number of housing sources will be released, and the mobilization of improved group demand has become one of the important trends。
According to guan yunyue, the context in which the policy is being developed is one in which there is still considerable room to rise at the end of the bargain, and there is no improvement in market sentiment or an important starting point for the liberalization of the chongqing policy. According to monitoring data from the zhu guangcheng data research centre, 61,219 new commercial housing units were opened in 2023, representing a small increase of 10. 9 per cent over 2022, but the year-wide turnover has remained low in recent years, about 60 per cent lower than the 2021 and previous years. At the same time, according to the mdi model developed by the zhuge data research centre, the chongqing mdi has so far been declining for eight consecutive months, reaching -0. 73 in december 2023, at a low level in the market viewing area. As a result, the trend towards improved market demand and mood remains uncertain and continued “demand promotion” remains one of the important tasks for chongqing。
