Twilight news client, journalist, jennifer
At the end of 2025, the ministry of finance issued another gift package
Individuals who purchase housing for less than two years will pay vat in full at the rate of 3 per cent. Compared to the previous 5 per cent, there was a marked downward revision. Assuming the purchase of second-hand houses at a total cost of $2 million, there is a prior payment of value added tax of approximately $100,000. Under the new policy, only 60,000 yuan was paid, equivalent to a six-off。
Trade in housing for individuals less than 2 years
Value added tax reduced to 3 per cent
On the evening of 30 december, the ministry of finance published a bulletin on the value-added tax policy for the sale of housing by individuals。
The announcement contains two main points:
First, individuals (other than general taxpayers in individual businesses, same as) pay vat in full at the rate of 3 per cent for foreign sales of housing for less than two years。
Second, individuals are exempt from vat for the purchase of housing for foreign sales for more than two years (including two years)。
The proclamation came into effect on 1 january 2026. Prior to 1 january 2026, vat related to the sale of housing by individuals that had not yet been declared is subject to the provisions of this proclamation。
Purchase of a single and second home
No more than 140m2 pays the tax at 1%
On 13 november 2024, the ministry of finance, the general tax administration and the ministry of housing, urban and rural construction issued a bulletin on tax policies to promote the smooth and healthy development of the real estate market, in order to increase tax incentives on housing transactions。
Raised the size criterion from 90 square metres to 140 square metres, which had previously benefited from a 1 per cent low tax rate, and clarified that the second flat tax premium for households could be applied across the north and beyond。
Specific policies are as follows:
(i) tax on the acquisition by individuals of the sole home of the family (household purchaser, spouse and minor children, same as the family member), with an area of 140 square metres and below, reduced by 1 per cent and above 140 square metres, reduced by 1. 5 per cent。
(ii) taxes reduced by 1 per cent for the purchase of a second home by an individual with an area of 140 square metres or less; taxed by 2 per cent for an area above 140 square metres. The second home is the second home purchased by a family who already owns one。
Hangzhou further clarify the tax concession area
I don't even know each other about the four downtowns
On the hangzhou side, on 18 april 2025, a joint communication was sent by the hangzhou home offices, taxes and finances to adjust the rules governing the entitlement to the first and second tax concessions。
The rules have been adjusted to read as follows: for the purchase of housing within the upper city, arch, western lake, coastal zone, the only home to which the family is entitled, and the number of housing packages under the second flat tax concession, the area in which the dwelling is purchased is defined as the administrative area of the district in which it is purchased。
In accordance with the previous regulations, the first and second rates are reduced by 1 per cent for the purchase of 140 m2 or less, and the third and above rates by 3 per cent. However, the first and second sets of determinations are not entirely “district-based”, but rather consider as one area the four central districts of lake west, upper city, archaeo and the riviang. If there is one in the river, there is one in the arches, and a third in the lake west, the tax is levied at 3 per cent。
According to the new deal, the four central urban areas will not be recognized in the future, and the purchase of new houses in lake west, as described above, can still be considered the first one, with a tax reduction of 1 per cent. This also implies harmonization of the tax recognition criteria for first flats with those for mortgages。
