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Housing Tax Changes Announced

HOME prices will now factor into calculations of housing title tax in Shenzhen, instead of the previous calculation that was based on home prices per square meter, housing officials announced this week.

The new policy splits Shenzhen’s 10 districts and new areas into six housing price zones, with different price caps that trigger a higher tax rate. Homes sold for less than 3.9 million yuan (US$632,212) in Futian and Nanshan districts, for example, are subject to a title tax of only 1 percent of the total home price, provided they also are smaller than 144 square meters.

The 1 percent tax rate also applies to homes sold for less than 3.1 million yuan in Luohu and Yantian districts, less than 2.4 million yuan in Bao’an District and Longhua New Area, less than 2.1 million yuan in Longgang District, less than 1.9 million yuan in Guangming New Area and less than 1.6 million yuan in Pingshan and Dapeng new areas.

A 90-square-meter apartment sold for 2.7 million yuan in Futian District, or 30,000 yuan per square meter, would therefore require the buyer to pay a title tax of 27,000 yuan under the new standard.

The previous standard imposed a higher title tax — usually 3 percent of the total home price — for homes that sold for more than a certain amount per square meter. In Futian, for example, people who purchased apartments for more than 23,200 yuan per square meter paid the higher tax rate. Under that standard, the buyer of the 90-square-meter apartment would have had to pay a tax of 81,000 yuan.

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