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Announcement of Hunan Local Taxation Bureau on Further Standardizing the Administration of Land Appreciation Tax

Document No.:

Taxes:Land Appreciation Tax

Date of Promulgation:

IssueDepartment:Local Taxation Bureaus of Localities

Date of Implementatio:2014-04-28


For the purpose of further strengthening the administration of tax levy and collection of real estate industry, regulating the administration of Land Appreciation Tax, preventing and controlling the law enforcement risk, according to the spirit of “Provisional Regulations of the People's Republic of China on Land Appreciation Tax and its detailed rules for the implementation, and Notice of State Administration of Taxation on Strengthening the Administration of Tax Levy & Collection of Land Appreciation Tax (Guo Shui Fa (2010) No.53 ), the relevant policies of our province on land appreciation tax are herby promulgated as follows:


I. Issues on the subject of Land Appreciation Tax liquidation 


It is the legal obligation of all taxpayers to declare Land Appreciation Tax liquidation. Taxpayers shall be the subject of Land Appreciation Tax liquidation and be responsible for the authenticity, accuracy and completeness of their declarations of Land Appreciation Tax liquidation.


For qualified taxpayers who fail to declare the Land Appreciation Tax liquidation in accordance with the tax law or the deadline and contents specified by the taxation authorities, they shall be dealt with in accordance with the relevant provisions of Law of the Peoples Republic of China on Administration of Tax Collection


. Issues on the stage and classification of Land Appreciation Tax liquidation


The liquidation of Land Appreciation Tax shall be made for each real estate development project as approved by the relevant state departments. In principle the liquidation unit shall be confirmed   according to the Construction Engineering Planning Permit.


Liquidation units shall be classified as ordinary dwelling housesnon-ordinary dwelling houses, and non-residential buildings for the purpose of separate calculation of appreciation amount and rates. LAT returns shall be filed in accordance.


. Issues on dealing with the liquidation of underground garages (parking spaces) 


For the salable underground garages (parking spaces) which are built by real estate development enterprise, they shall be liquidated as non-residential properties. 


For the non-salable underground garages (parking spaces) which are reconstructed by real estate development enterprises by using underground constructions and underground civil air-defense constructions built according to government regulations, if upon completion, the property rights belong to all the owners or they shall be handed over to the government without compensation (determined on the basis of the registration of property transfer, certification by a notary department, or the announcement made in a prominent position of real estate projects and known by all the owners), their costs and expenses are deductible; incomes gained by real estate development enterprises from transferring the permanent use right of non-salable underground garages (parking spaces) as mentioned above shall be, in accordance with the proportion of different types of building area of aboveground properties, included respectively in the sales revenue of different types of properties for the LAT purposes, and their costs and expences shall be deducted according to the matching principle.


. Issues on the calculation and allocation of land costs

For those who obtained the use rights of one bulk of land and then develop and transfer real estate by installments, the payment for purchasing land use rights and the compensation fee for land acquisition and demolition (hereinafter referred to as land costs) shall be calculated for the allocation purposes in accordance with the proportion of areas occupied by the multi-stage development project in the total area occupied by the tract of land transferred. For different types of real estate development products established in one project, the land costs shall be calculated for the allocation purposes in accordance with the proportion of the floor space of the different types of real estate development products in the total area of the project. However, as for the different types of real estate covering relatively independent areas, the land costs shall be calculated for the allocation purposes in accordance with the proportion of the area of such a type of real estate in the total area of real estate of the project.


. Issues on deducting the cost of buildings for both dwellings and commercial purposes 


If a single building is used for both residential and commercial purposes, the construction and installation expenses of commercial buildings can be adjusted according to the coefficient of the storey height. 


Coefficient of storey height of commercial buildingsaverage storey height of commercial buildingsaverage storey height of residential dwellings


. Issues on indirect costs of development


Indirect costs of development refer to the expenditures derived from the direct organization and management of development projects, including wages, employee benefits, depreciations, repair charges, office expenses, charges for water and electricity, labor protection expenses, amortization of temporary houses, project supervision fees, and safety supervision fees. 


. The present announcement shall come into force on May 1, 2014. Any provisions in conflict with the provisions of this announcement shall be superseded by the latter.


The announcement is hereby given as above.


Hunan Local Taxation Bureau


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