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“tax deduction” is one of the most frequent key words for the two national conferences this year. In the case of real estate, since this year, the value added tax (vat) and the supplement have been adjusted from 5. 6 per cent to 5. 3 per cent for second-hand dwellings that have not been registered for more than two years. In the case of a house with a total cost of $5 million, there is a reduction of approximately $143,000。
The reporter learned from hangzhou authorities and the 12366 tax service hotline that due to the time lag between the date of implementation of the preferential policy and the date of its issuance, some regions have now completed tax refunds and some landlords have benefited from this additional “benefit”。
Second-hand residential transactions under 2 years of age
There's been a drop in taxes
In the case of second-hand residential transactions in hangzhou, the current policy is to exempt from vat dwellings that have registered real estate for two years or less。
In calculating the second-hand value added tax (vat) on second-hand dwellings and its surcharges, it is common practice to summarize 5. 6 per cent of the total house price. There are two components: one is vat, which is calculated at 5 per cent of total housing; the other is three additional taxes, including urban maintenance and construction taxes, education surcharges and local education surcharges, which together amount to 0. 6 per cent of total housing. In addition, hangzhou is temporarily exempt from stamp duty for the sale or purchase of housing by individuals and levys a halving of non-residential flats, such as hotel apartments。
On 23 january this year, the zhejiang department of finance issued a circular on the implementation of inclusive tax relief for small microenterprises in zhejiang province (hereinafter referred to as the circular) to further support microenterprise development. The circular mentions that small vat taxpayers are subject to a 50 per cent reduction in resource tax, urban maintenance and construction tax, property tax, urban land use tax, stamp duty, cropland occupancy tax and education fee supplement, and local education supplement. The duration of the preferential policy is 1 january 2019 to 31 december 2021。
Thus, under the circular, second-hand dwellings with less than two years of age are adjusted from 5. 6% to 5. 3% for their transaction value added tax and supplement。
For example, a house of $5 million for less than two years is charged as a fee of $2. 667 million ($5 million/10. 05 (an increase in the collection rate) x 5. 6 per cent). After the new deal, on the basis of a 5. 3 per cent vat surcharge, only $25. 24 million (5 million/1. 05 x 5. 3 per cent) was paid. In comparison, tax revenues could be saved by approximately $14. 3 million。
Taxes are returned directly to taxpayers
Some landlords get benefits
As the date of the official publication of the notice is 23 january of this year, the duration of the implementation of the preferential policy begins to run on 1 january of this year. This means that second-hand houses, which have been closed for less than two years during this period, involve tax refunds。
According to the circular, tax payers who are eligible for tax refunds will be contacted by the tax department staff by telephone. Taxpayers are required to provide the name of the bank card holder, the depositary bank (specific account number) and the number of the card (the name of the card holder needs to be consistent with the information of the seller on the vat-plus list), and the staff of the tax authorities will process the bank transfer directly。
Financial reporters have learned that the hangzhou tax authorities have now begun processing tax refunds, which have been completed in some regions。
However, in hangzhou, most of the second-hand residential transactions under two years of age are actually covered by buyers, who receive net prices. Under the law, the seller is the taxpayer, i. E., although the tax is actually paid by the buyer, the extra tax is refunded to the seller. In other words, some landlords who sold their houses received additional “benefits” for tax reimbursement。
In response, the staff of the 1236 tax service hotline told journalists that the specific costs of the buyers and sellers arose in the context of individual transactions and required coordination between the buyers and sellers themselves。
So, what is the impact of lower taxes on second-hand house prices? I love the staff of the data research centre who say that the reduction in second-hand residences under two years of age has limited incentives for the entire second-hand house market because of the relatively high taxes they pay and therefore very few transactions are made, the vast majority of which have been for two years。
