Top Biz News

House sales jump ahead of deadline

By Zhu Zhe in Beijing and Zhang Yu in Shanghai (China Daily)
Updated: 2006-08-02 08:39

Faced with such a large number of traders, local taxation bureaux in Beijing decided that anyone who went to the bureaux to register the sales of their houses before yesterday's deadline and finish the transactions by the end of this month could be exempted from the tax.

The new policy, which follows a series of central government measures announced earlier this year to cool down the overheated real-estate market, is expected to further squeeze speculation.

Figures from the National Bureau of Statistics show that by the end of this June, more than 121 million square metres of commercial houses had remained unoccupied nationwide because of the rising price, up 17.2 per cent over the same period last year.

Lin Zengjie, land management professor at Renmin University, described speculation as "a major contributor to the rising price," Xinhua reported.

"The collection of individual income tax and transaction fees may increase the speculation cost, and thus is beneficiary to the development of a healthy market," he was quoted as saying.

The government started to collect a 5.5 per cent transaction tax on sale of houses within five years of purchase this June, also a move to fight against speculation.

Xin Xin, a broker with the chained 5i5j Property Company in Beijing, told China Daily that the latter policy would not be as strict as the earlier one as it contains many favourable items.

The base of the individual income tax is transaction price minus the original price. Reasonable costs, including home improvement and facility maintenance expenditure as well as mortgage interest, would be excluded from the taxable amount. But the base of the transaction fees is the total transaction price.

Xin also warned of the "possibility that sellers shift the extra tax to buyers, which may increase the price of second-hand houses."