The Chinese government is likely to cut the business and income tax levied on property transactions to further stimulate the real estate market, the English China Daily reported on Friday.
The newspaper, quoting industry insiders, said policy makers at the three-day Central Economic Work Conference, which ended on Wednesday, had recommended the construction of more low-cost houses and reducing the tax burden for individual home purchases.
Property deed tax, business tax and income tax are major hurdles for new home buyers and also in second-hand house deals, said Yang Shaofeng, Managing Director of Conworld, a Beijing-based property broker.
The taxes on buying a second-hand apartment could be around 7 percent or even near 10 percent if the apartment is larger than 140 square meters.
"The Ministry of Finance, State Administration of Taxation and the Ministry of Housing and Urban-Rural Development may reduce the taxes soon, in line with the central government decision at the conference," Yang said.
The China Real Estate Association has submitted a proposal to the National Development and Reform Commission (NDRC), the top economic planner, seeking more favorable policies to help the troubled sector, said the daily.
"We have made some suggestions to the top economic planner," said Zhu Zhongyi, vice-chairman of China Real Estate Association.
The proposals include cutting income tax for real estate firms, encouraging local governments to buy residential buildings to house low-income families and urging banks to finance quality property projects.
Property investment usually accounts for 25 percent of the overall investment. In some cities, this proportion could be even above 50 percent.
In November, property prices in 70 major Chinese cities rose 0.2 percent from a year earlier, or 1.4 percentage points lower than October, the NDRC said.
The growth rate was the lowest since the NDRC started to publish its figures in July 2005.
Source:Xinhua
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