A Study of Real Estate Regulation and the Taxation System

Abstract

The Chinese government announced new rules that affect the real estate market in the country, including the creation of a tax paid to vendors and could reach 20 percent of the proceeds from the transaction, according to the official Xinhua news agency reported. Amid expectations of rising prices in the industry, the new rate is intended to “cool and streamline” the country's property market, which since last year has seen a sharp rise in prices. For real estate transactions, so far the only seller paid between 1 and 2 percent of the sales price and did it through the income tax. Tribute addition, Beijing will force the bank branches located in cities with high housing prices to increase the amount of payment and the interest rate of mortgage loans to buyers who purchase a second home. Moreover, it prohibit the purchase of homes for families who were not born in the town where you want to complete the transaction, provided you already have a house to his name and prove that “have not paid taxes or social security during the years needed”.