Recently there was a question from an online friend: “i have a second child this year, and i'm going to buy a bigger house, and i've heard that i can get a tax refund, what exactly is the regulation, and what are the conditions to be met?”
According to the policy, between 1 october 2022 and 31 december 2025, taxpayers who sell their own homes and repurchase them in the market one year after the sale of the existing ones were given tax refunds on the personal income tax paid for the sale of the existing homes. Of these, if the amount of the new home is greater than or equal to the amount of the transfer of the current house, the full amount of the personal income tax paid is refunded; if the amount of the new home is less than the amount of the transfer of the current house, the amount of the new home is refunded to the personal income tax paid for the sale of the existing house as a proportion of the amount of the transfer of the existing house. It should be noted that neither the amount of current housing transfers nor the amount of new housing purchased here contains vat。
Taxpayers are entitled to the above-mentioned benefits under several conditions. First, the taxpayer should sell and repurchase housing within the same city. The same urban area is the same administrative area as the municipalities, sub-provincial cities and municipalities (districts, states, unions). Second, there must be a direct link between the taxpayer who sells his own home and the newly purchased home, and the owner or owner of the new home。
For example, in december 2024, a flat was sold and, in may 2025, a new home was bought in the same city, both of which fell within the time frame set by the policy and therefore fell within the time frame of the tax refund policy。
If the price of a small sale is $3 million and the personal income tax is $30,000; if the purchase price is $4 million, the full amount of the personal income tax paid is reimbursed. If the sale price of a small house is $6 million and personal income tax is paid, and if the purchase price of a new house is $5. 4 million, the refund of personal income tax paid on the sale of the current house is based on a rate of $5. 4 million/$6 million = 90 per cent, i. E. $54,000 = 60,000 x 90 per cent。
For the sale of housing owned jointly by more than one person or new home purchased jointly by more than one person, the amount of the current transfer of the taxpayer's home or the amount of the new home purchased shall be determined in accordance with the taxpayer's share of the property。
For example, xiao li and pony jointly own a housing unit, each accounting for 50 per cent of the home ownership. In january 2024, two persons transferred the house at a price of $2 million, each paying $20,000 in personal income tax. In may of the same year, li repurchased a housing unit in the same city at a cost of $1. 5 million, and when he applied for a tax refund, his current housing transfer amounted to $1 million (us$ 2 million x 50 per cent = us$ 1 million) and his new home purchase amounted to 1. 5 million, the amount of which was refunded = personal income tax paid at the time of the transfer of the housing stock = us$ 20,000。
In july of the same year, ponys and others jointly purchased a housing unit in the same city at a cost of $2 million, which accounted for 40 per cent of the property. Upon applying for reimbursement, the amount of the current housing transfer was 1 million yuan (2 million yuan x 50 per cent = 1 million yuan) and the amount of the new home purchased was 800,000 yuan (2 million yuan x 40 per cent = 800,000 yuan). The amount of the refund = the amount of new housing purchased/current housing transfer multiplied by the amount of personal income tax paid at the time of the transfer of the current home = 800,000 yuan/million yuan x 20,000 yuan = 16,000 yuan。
Sun zheng suggested that, in the processing of tax refunds, the taxpayer is required to file an application form for individual income tax reimbursement for repurchased housing and provide such information as the taxpayer's identity document, a contract for the transaction of the house in place, a second-hand house for the newly purchased dwelling, a contract for the transaction of the house, a certificate of real estate rights and a copy thereof, a new dwelling for the new dwelling, and a contract for the transaction of the house and a copy thereof, filed (on-line) by the urban and rural construction sector。
With regard to the place of processing, the taxpayer is required to make an appointment with the local tax authorities that pay personal income tax when selling the house. Where a taxpayer sells a house and pays a personal income tax, it must apply to the tax authorities of the department for a refund。
Sun stated that, in order to ensure that the policy was well-enabled and effective, the tax authorities relied on large tax data, regularly screened the list of unentitled taxpayers, sent text messages from mobile phones, and accurately promoted the policy of preferential housing replacement. At the same time, joint tax administration is being strengthened, in collaboration with the departments of housing, urban-rural construction, natural resources, etc., so as to ensure real-time sharing of key information, such as housing transaction contract filing and real estate registration, in coordination with the ministries of finance, treasury, etc., to ensure adequate tax refund funds and to provide easier tax refunds to taxpayers. (journalist)
