At a press conference held by the State Council Information Office on October 17, Assistant Minister of Finance Song Qichao addressed measures aimed at promoting the stable and healthy development of the real estate market. He revealed that the Ministry of Finance is actively working on clarifying tax policies related to ordinary and non-ordinary residential properties, focusing primarily on value-added tax (VAT) and land value-added tax.

Song explained that under the current policies, outside of the four first-tier cities—Beijing, Shanghai, Guangzhou, and Shenzhen—individuals selling residential properties that they have owned for more than two years are exempt from VAT, regardless of whether the homes are classified as ordinary or non-ordinary. In contrast, in these first-tier cities, individuals are exempt from VAT on the sale of ordinary residential properties held for over two years, while VAT is applied to the sale of non-ordinary properties under the same conditions. Regarding land value-added tax, ordinary standard residential properties that experience a value increase of less than 20% at the time of sale are also exempt.

The Ministry of Finance is currently in the process of making further adjustments to these tax policies. Song outlined three key considerations driving these adjustments:

First, it’s essential to synchronize the pace of real estate regulation in targeted cities with local financial revenue situations to ensure that arrangements are both scientific and reasonable.

Second, the policy framework aims to allow local governments some degree of autonomy, helping to maintain stability and fairness within the policies.

Third, the goal is to significantly reduce the financial burden on real estate companies and homebuyers, thereby facilitating a stabilization and rebound in the real estate market.

Song confirmed that the Ministry is diligently working through the necessary procedures for these specific policies and that they will be promptly announced to the public once approved.