The city has a policy of great profitability. On 30 december, the ministry of finance and the directorate-general of taxes issued a bulletin on the value-added tax policy for the sale of housing by individuals, who (excluding general taxpayers among individual business owners, the same as) will pay the full value-added tax (vat) at the rate of 3 per cent for the purchase of housing for less than two years; individuals will be exempt from vat for the purchase of housing for more than two years (including two years)。
This measure has been in force since 1 january 2026 and the value added tax (vat) related to the sale of housing by individuals prior to 1 january 2026, which has not yet been declared, will be implemented in accordance with this proclamation。
The chief research fellow of the centre for housing policy studies of the centre for urban and rural planning of guangdong province believes that vat at a rate of 5 per cent of the total would result in very high transaction costs, which would be a significant cost for both buyers and sellers. At this time, potential buyers are more sensitive to transaction costs and have higher claims to lower transaction taxes. The fact that a large number of home buyers have to pay hundreds of thousands, if not hundreds of thousands, of taxes while they have to pay the down payment will have more obvious constraints on transactions。
“in this new deal, the vat rate for second-hand houses is reduced from 5 per cent to 3 per cent for housing up to two years, and was waived for more than two years。
Zou xiaowei, a senior researcher at the shenzhen centre for research, stated that the new vat policy had resulted in a 2 percentage point reduction in the cost of holding a property transaction tax for less than two years, a significant reduction in transaction costs, the interest in holding a new house for less than two years, and the acceleration of new house transactions, the activation of replacement demand and the completion of replacement chains。
In the case of 5 million yuan in housing, the value added tax (vat) paid less than two years before the adjustment fell to 146,500 yuan after the new deal came into existence, a reduction of 92,000 yuan。
“the reduction in taxes and fees may attract more demand to the market, and these measures can play a role in market recovery during the downturn.” zou xiaowei indicated。
According to the central institute analyst, the latest policy is clear, and until 1 january 2026 the value added tax (vat) associated with the sale of housing by individuals was not declared and could also be implemented on condition, reflecting the continuity and humanization of tax policy。
In the policy context, the provisions of the 2016 business tax conversion to value added tax pilot transition policy make it clear that “individuals who purchase housing for less than two years will pay vat in full at a rate of 5 per cent; individuals who buy housing for more than two years (including two years) will be exempt from vat. The above-mentioned policy applies to areas outside beijing, shanghai, guangzhou and shenzhen”。
In late 2024, the vat policy was further optimized, with a joint communication from the ministry of finance, the general tax administration and the ministry of housing, clarifying that, following the abolition of the non-ua standard in the north (the first-line cities successively eliminated the ua and non-ua standard), vat was collected in a manner consistent with other cities, i. E., vat was waived for more than two years (including two years), and vat was fully calculated for less than two years, but vat was still calculated at 5 per cent, in accordance with article 5, paragraph 1, of the operational tax conversion to the vat pilot transition policy。
From a market dimension observation, li yuja indicated that the price of second-hand houses had expanded over the same period of time for two months, increasing pressure for a steady fall; hot-spot cities continued to fall and markets were expected to be weaker. Trade in new houses has also begun to weaken, and the rate of de-diversion of hot city-friendly housing projects has decreased。
In this context, the central bureau analyst stated that at the macro level, at the december 2025 central economic work conference, “investing in the stabilization of the real estate market”, the office of central financial affairs interpreted it as identifying concrete initiatives to “stable the market from both the supply and demand sides” and that “more targeted measures are needed on the demand side to fully release the rigid and improved demand of the population”。
“the recent initiative in beijing to optimize housing restrictive measures has been an important step in cleaning up unjustified restrictions on housing consumption. This policy has directly reduced the tax on second-hand housing transactions, helping to reduce the cost of housing replacement, better support to improve the release of sex housing demand and boost market activity. At the same time, it should be noted that the external sale of housing by individuals who have purchased housing for less than two years increases the market supply in the short term, creating old used housing or creating new marketing pressures. This is what the analyst says。
In the view of the vice-president of the institute for evictions, the adjustment of the real estate value-added tax (vat) policy, combined with the optimization of the tax and personal income tax policies at the local level, has created a favourable tax and tax policy environment for housing consumption. A number of measures to reduce transaction costs are expected to promote expectations and enhance the confidence of home buyers. “market trading has become more dynamic, not only in terms of access to stocks, but also in terms of its positive impact on stabilizing the city.”
