I. Tax due from the transferring party (seller)
(i) value added tax
1. Individual transfer for purchase of housing
(1) payment of vat in full at the rate of 5 per cent for the foreign sale of housing purchased for less than two years
(2) persons who will purchase housing for a period of more than 2 years (including 2 years)
1 beijing, shanghai, guangzhou and shenzhen are exempt from vat。
In beijing, shanghai, guangzhou and shenzhen, individuals will pay vat at a rate of 5 per cent for the difference between the sale income and the purchase price of non-ordinary housing for more than two years; and individuals will be exempt from vat for the external sale of ordinary housing for more than two years (including two years)。
Note: based on national taxes [2005] no. 89, when an individual buys a house, as indicated in the certificate of ownership of the house or in the tax clearance certificate; issued under the state tax [2006] regulation no. 144 provides that, in the case of the external sale of a dwelling to which an individual is entitled by means of a non-reimbursable grant, the purchase of a dwelling by means of a non-reimbursable grant other than an inheritance, will, divorce, maintenance relationship or a direct relative is determined on the basis of the time indicated in the new title certificate or tax clearance certificate following the grant。
2. Individual sales of self-built housing are exempt from vat
3. Individuals involved in the division of household property are exempt from vat for the free transfer of immovable property。
Based on taxes annex 3 (transitional policy) on the free transfer of immovable property by individuals involved in the division of family property is exempt from vat, including: the division of divorced property; the grant of free gifts to spouses, parents, children, grandparents, grandchildren, siblings; the grant of free gifts to dependants or dependants for whom they have a direct obligation of support or support; the death of all owners of home ownership; and the acquisition by law of property rights by legal heirs, will heirs or bequests。
(ii) additional taxes
The amount of vat paid is based on the basis of tax, which, according to the financial tax no. 4, reduced by 50 per cent (including natural persons) the small vat taxpayer from 1 january 2019 to 31 december 2021. Individuals are exempted from vat and from city maintenance and construction taxes and surcharges. As of 1 february 2016, the monthly sales or turnover taxable on a monthly basis does not exceed $100,000 (quarterly sales or turnover taxed on a quarterly basis does not exceed $300,000) and exemption from education fees and local education supplements (including individual households including general taxpayers, but excluding natural persons who are subordinate taxpayers)。
1. Urban maintenance tax = value added tax x (1 per cent or 5 per cent or 7 per cent) and tax rate 7 per cent if the taxpayer is located in an urban area; 5 per cent if the taxpayer is located in a county or town; and 1 per cent if the taxpayer is not located in a city, county or town。
2. Education costs plus = value added tax x 3 per cent
3. Local education plus = value added tax x 2 per cent
(iii) personal income tax
Income from the transfer of property less the original value of property, transfer tax and reasonable expenses (international tax) [2006] the balance after 108 is the amount of taxable income, calculated at the applicable rate of 20 per cent for the individual income tax of the “income from transfer of property”. Taxpayers who fail to provide complete and accurate proof of the original value of the house and are unable to correctly calculate the original value of the house and the taxable amount are subject to an approved tax. Individuals continue to be exempt from personal income tax by transferring income derived from their own use for more than five years and as the sole household home (housing)。
Note:
1. No personal income tax shall be levied on the parties in respect of property rights in the following cases:
(1) the owner of the home grants property rights free of charge to spouses, parents, children, grandparents, grandchildren, grandchildren, siblings
(2) the owner of the home grants the right to own the house free of charge to a dependant or provider who has a direct or maintenance obligation towards him
(3) the death of the owner of the home, the legal heir, the heir to the will or the bequest who acquired the property in accordance with the law。
2. The division of property rights by means of divorce is the disposal of joint property by both spouses. Individual property rights through divorce are transferred and no personal income tax is levied。
The income derived from the transfer of a divorced estate is allowed to be deducted from the corresponding property's original value and reasonable expenses, in accordance with the provisions of document no. 121 of the state tax, and the balance is paid at the established rate of personal income tax; the corresponding property's original value is multiplied by the sum of the original value of the initial purchase of the house and the related tax charges, multiplied by the share of the transferor's ownership of the home. An individual may apply for an exemption from personal income tax for the transfer of income from a divorce estate that is consistent with the sole home for which the family lives for more than five years。
3. Foreign transfers of housing acquired by other non-reimbursable grants are based on fiscal revenues [2009] document 78 provides that when a grantee transfers a gifted house, the original grantee's income from the transfer of the gift is set off against the balance of the actual cost of the purchase of the house and the related taxes paid by the grantee in the course of the grant and transfer. In the event that the grantee transfers a house for which there is a manifestly low and unjustified price, the tax authority may approve the transfer income on the basis of an assessment of the price of the house or other reasonable price。
(iv) stamp duty
Calculated on the basis of the sum of 0. 5 per thousand, of which an individual sells or buys a dwelling free of stamp duty. Note: succession, gifts, exchanges, division。
(v) land value added tax
1. Applicable rates
The value added did not exceed 50 per cent of the amount deducted from the project and the tax rate was 30 per cent
(a) the tax rate is 40 per cent, in excess of 50 per cent - 100 per cent of the amount deducted from the project
(a) the tax rate is 50 per cent in excess of 100 per cent to 200 per cent of the amount deducted from the project
The tax rate is 60 per cent over and above the 200 per cent deduction of the project amount。
2. Deductions include:
(1) where the relevant documents (invoices, tax certificates, contractual agreements and payment certificates, judicial documents) are provided, the amount is recorded on the basis of the evidence and the deduction is added to 5 per cent per year。
The turnover tax invoices and other supporting evidence are based on the amount contained in the invoice or supporting evidence; the general value added tax invoice is based on the total amount of the price tax contained in the invoice; and the specific value added tax invoice is based on the amount of value added tax not included in the invoice。
Reasonable costs are the costs of housing improvements, interest on housing loans, fees, notaries, etc. Actually paid by the taxpayer as required。
(2) where an evaluation body issues a “replacement cost method” to assess the replacement cost price of a building, the amount is recorded on the basis of the assessment price and the proof of acquisition of land use rights, and is included in the deduction。
(3) other deductible items: turnover tax paid at the time of transfer of the property and its attachments, stamp duty; assessment fees paid for the property subject to the calculation of the tax; acquisition of property bond tax (except for those already included in the assessment price)。
3. Land value added tax (vat) is levied at a fixed rate if it is not possible to quantify the amount deducted from the project。
4. Of which
(1) individual transfer of housing free of land value added tax
(2) land value added tax (vat) may be waived for the exchange of residential real estate between individuals, as verified by local tax authorities。
Ii. Responsibility of the submission (buyer)
(i) taxes
Taxes are levied at transaction prices plus rates excluding vat, with rates ranging from 3 to 5 per cent. The tax rates applicable to the tax shall be determined by the people's governments of the provinces, autonomous regions and municipalities directly under the central government within the limits set out in the preceding paragraph and shall be reported to the ministry of finance and the general state tax administration. Of which:
The tax is reduced by 1 per cent for the purchase of a single home by an individual (the family size includes the purchaser, the spouse and the minor child, the same amount) for an area of 90 square metres and less, and by 1. 5 per cent for an area above 90 square metres。
2. Taxes for the purchase of a second set of improved housing units by individuals with an area of 90 square metres and less, reduced by 1 per cent, and for the purchase of more than 90 square metres, reduced by 2 per cent. Beijing, shanghai, guangzhou, shenzhen
3. Legal heirs under the inheritance law of the people's republic of china (including spouses, children, parents, brothers and sisters, grandparents, grandparents) shall inherit land, property and property without tax. (excluding will succession)
4. Individual gifts and immovable property shall be made free of charge and shall be taxed in full. The basis for its taxation is determined by the provisional tax regulation, which provides that gifts are authorized by the collecting authority by reference to the market price for the sale of the house and are collected in accordance with the law. Its tax rate, which is not for the purpose of purchase, shall be based on the tax rate established by the provincial government of the place where the property is located and shall not be subject to the tax credit policy of individual purchase of housing。
Basis: provisional regulation on taxes and by-laws, circular on adjustments to the contract tax on real estate transactions, business tax preferences (fiscal [2016] 23), circular of the national tax administration on the strengthening of non-reimbursable gifts to individuals in real estate transactions and issues related to the administration of real estate taxes (state tax) [2006] no. 144)
(ii) stamp duty
Calculated on the basis of 0. 5 per thousand of the amounts contained. Of these: personal sale or purchase of housing, free of stamp duty. Note: succession, gifts, exchanges, division。
(iii) personal income tax
Individual income tax on personal gifted immovable property may not be levied with authorization and must be levied strictly in accordance with the provisions of the tax law. The taxable income of the non-reimbursable gifted home of the grantee is the value of the gift, as indicated in the contract for the real estate gift, less the balance of the related tax paid by the grantee during the grant. Personal income tax is paid at the applicable rate of 20 per cent。
Iii. Case resolution
In february 2020, li, a resident of the city of guiyang, sold a house with an area of 100 square metres, the date of the title certificate 10 december 2018, the purchaser zhang, the buyer bought the first house for the family, and the transaction price (or the assessment price by the tax authorities) was $1. 5 million, and the buyer and seller paid taxes and fees of $1. 5 million
Parsing:
(i) tax due from the seller li
1. Value added tax = 150/*5% = 7. 5 million yuan
City building tax = 7. 50*7% *50% = 0. 2625,000 yuan
Education surcharge = 7. 50*3%*50% = 0. 1125 million yuan
Additional local education costs = 7. 50*2%*50% = 0. 075 million yuan
Based on the provisions of the business tax conversion to the value added tax pilot transition policy (fiscal [2016] annex 3 provides for the exemption of vat and attachments if the dwelling is held for two years; 5 per cent of value added tax, 7 per cent of city building tax (urban area), 3 per cent of education fees and 2 per cent of local education fees if less than two years have elapsed. According to the circular of the treasury department of guizhou and the tax administration department of guizhou of the national tax administration department on the 50 per cent reduction in local taxes and surcharges for small taxpayers of value-added tax in my province (tax no. 4), small taxpayers are entitled to a 50 per cent reduction in the rate for the construction of city taxes and additional benefits。
2. Personal income tax
(1) assumptions that li could not provide an invoice for the original value of the house
Personal income tax = (150*2%) = $30,000
According to the fiscal code [1999] 278, state tax [2007] no. 33, international taxation [2006] no. 108), lee's local tax authorities are able to provide 20 per cent of the difference in the original value of the house (invoice for the original purchase, etc.); they are unable to provide the original value of the house, which is levied at 2 per cent of the full amount; and they are exempt from personal income tax if they hold the family's sole home for five years。
(2) assuming that li can provide valid proof of the actual payment of the house price and the related tax fees paid at the time of the purchase of the house is 1. 3 million yuan, according to the circular of the ministry of finance, the national tax administration, on the issue of post-replacement tax, property tax, land value added tax, basis of personal income tax (fiscal [2016] article 4 provides that income taxable from personal income tax on the transfer of a person's home does not include value added tax (vat), the value added tax (vat) included in the price paid by the person when acquiring the house is included in the original value of the property, and the tax deductible from the calculation of the proceeds of the transfer does not include value added tax (vat) paid in the current transfer。
Tax income tax = (%)
150-130-0. 2625-0. 1125-0. 075*20% = 39. 1 million yuan
3. Land value added tax, suspended. (customs) no. 137)
4. Stamp duty, suspended. (customs) no. 137)
(ii) the purchaser, zhang zhang zhang, is liable for taxes:
1. Taxes = (150 * 1. 5 per cent) = 22. 25 million yuan
Under article iii of the provisional regulations of the people's republic of china on taxes, the tax rate is 3-5 per cent. The applicable tax rates are determined by the people's governments of the provinces, autonomous regions and municipalities directly under the central government within the bounds of the statute and are reported to the ministry of finance and the general state tax administration for filing, and in accordance with the tax law [2016] under decree no. 23, the tax on the purchase of a family's first home is less than 90 m2 and the tax is 1 per cent and above 1. 5 per cent; the tax on the purchase of a family's second home is less than 90 m2; the tax on the purchase of a family's third home or more is less than 90 m2 and 2 per cent; and the purchase of a family's third home or more is based on 3 per cent in guizhou。
Stamp duty: suspended. (customs) no. 137)
