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Notice of Ministry of Finance, State Administration of Taxation, and Ministry of Housing and Urban-Rural Development on Adjusting Preferential Deed Tax and Business Tax Policies at the Stage of Real Estate Transactions

Document No.:Cai Shui [2016] No.23

Taxes:Deed Tax,Business Tax

Date of Promulgation:2016-02-22

IssueDepartment:Ministry of Finance,State Administration of Taxation

Date of Implementatio:2016-02-22


Issued by: Ministry of Finance, State Administration of Taxation, Ministry of Housing and Urban-Rural Development

Document No.: Cai Shui [2016] No.23

Date of Issuance: 2016-02-17


Finance offices (bureaus), local taxation bureaus, departments of housing and urban-rural development (construction commissions, real estate bureaus) of all provinces, autonomous regions, municipalities directly under the Central Government and cities specifically designated in the state budgetary plan, state taxation bureaus of Tibet, Ningxia and Qinghai provinces (autonomous regions), the Financial Bureau and the Construction Bureau of the Xinjiang Production and Construction Corps.:


According to the relevant deployment of the State Council, the adjustments to preferential deed tax and business tax policies at the stage of real estate transactions are hereby notified as follows:


I. Adjustments to deed tax policies


(1) As for the housing purchased by an individual as the only house for his/her family (family members include the purchaser, the spouse and minor children thereof, the same below), if the floor area is 90 square meters or less, it shall be subject to deed tax at a reduced rate of 1%; if the floor area is over 90 square meters, it shall be subject to deed tax at a reduced rate of 1.5%.


(2) As for the second housing purchased by an individual for making improvements for his/her family, if the floor area is 90 square meters or less, it shall be subject to deed tax at a reduced rate of 1%; if the floor area is over 90 square meters, it shall be subject to deed tax at a reduced rate of 2%.


The term “second housing for making improvements” refers to the second set of housing purchased by the family which has had one already.


(3) For a taxpayer who claims for tax incentives, on the basis of the taxpayer’s application or authorization, the in-charge department of real estate at the place of housing shall give written inquiry results of taxpayers’ family housing situation, and timely deliver the inquiry results and housing-related information to taxation authorities. If the temporary lack of query conditions results in the failure of providing inquiry results of taxpayers’ family housing situation, the taxpayer shall submit the written credit guarantee of the actual number of family housing to taxation authorities. If the credit guarantee is not supported by facts, it shall be considered as the false filing of tax returns, which shall be dealt with according to relevant provisions of the “Law of the People’s Republic of China on the Administration of Tax Levy & Collection”, and the taxpayer’s untrustworthy and irresponsible records shall be input in the personal credit information system.


In accordance with the “convenience and efficiency” principle, the in-charge department of real estate shall be required to promptly give written inquiry results of taxpayers’ family housing situation; taxation authorities shall deal with the applications for tax incentives submitted by taxpayers within a specified time.


(4) Specific operational measures shall be formulated jointly by the departments in charge of finance, taxation, and real estate of all provinces, autonomous regions and municipalities directly under the Central Government.


II. Adjustments to business tax policies


The sale of housing which has been purchased by an individual for less than two years is subject to business tax at a full rate; and the sale of housing which has been purchased by an individual for two years or more is exempted from business tax. 


The specific procedures for tax exemption, time of housing purchased, issuance of invoices, obtainment of housing in the form of non-purchase, and other relevant tax regulations shall be subject to the related provisions of the “Notice of the General Office of the State Council on Forwarding the Opinion of Such Departments as the Ministry of Construction on Doing a Good Job of Stabilizing House Prices” (Guo Ban Fa [2005] No.26), the “Notice of the State Administration of Taxation, the Ministry of Finance and the Ministry of Construction on Intensifying the Administration of Real Estate Taxes” (Guo Shui Fa [2005] No.89) and the “Notice of the State Administration of Taxation on Some Specific Issues concerning the Implementation of Real Estate Tax Policies” (Guo Shui Fa [2005] No.172).


III. Issue about the scope of implementation


Beijing, Shanghai, Guangzhou and Shenzhen shall temporarily not implement Item 2 of Article 1 of preferential deed tax policies and Article 2 of preferential business tax policies; the business tax policies for transfer of individual housing in such cities shall still be subject to the “Notice of the Ministry of Finance, and the State Administration of Taxation on Adjusting the Business Tax Policies for Individual Housing Transfers” (Cai Shui [2015] No.39).


Areas other than the aforesaid cities and municipalities shall comply with all provisions of this Notice.


The Notice shall come into force on February 22, 2016.


Ministry of Finance

State Administration of Taxation

Ministry of Housing and Urban-Rural Development


February 17, 2016


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