Chinese property stimulus

Country:  China

22 December 2008

The Chinese state council has announced a new property incentive package aimed at low income housing and home ownership.
 
This means that someone who has owned their home for two or more years, can now sell it without having to pay business taxes. Previously, owners had to wait at least five years before selling their house tax-free. If they sell their house after less than two years, owners only have to pay taxes levied on the profit, not the sales price.
 
According to Gu Yunchang, official with Ministry of Housing and Urban-rural Development, the move is significant for the sector's development and helpful to counter the industry downturn.
 
The package is the government's latest move to support the ailing sector. Previous boosting measures included pledging to build more low-income housing and cutting mortgage rates and down payments for first homebuyers.
 
The government will also now allow people with "smaller-than-average" apartments to buy a second apartment under favourable loan terms, to boost homebuying.

A total of 2.7 trillion yuan (£262bn) was pumped into real estate development nationwide in the first 11 months of the year, up 22.7% y-o-y.

Between January and November, total sales were 490m sqm, down 18.3% y-o-y, whilst residential sales fell 18.8%.
 
But it is the aim of the above boosting measure to revive the market, hopefully by mid-2009.
 

Browse other Chinese property news stories, read articles about investing and buying property in China or view our range of property in China.