Tax incentives for real estate transactions will be strengthened in particular.
China announced a series of tax measures on Wednesday aimed at boosting the country's struggling real estate market, state media reported. Citing various government agencies, including the Ministry of Finance, state broadcaster CCTV said tax incentives for real estate transactions will be strengthened to “actively support basic and other housing needs”.
The real estate sector has long accounted for about a quarter of China's gross domestic product and has seen meteoric growth for two decades, but the years-long real estate crisis has dented growth as authorities aim for a target of around 5 % for 2024. China is trying to consolidate the real estate sector and said in October it would increase available credit for unfinished housing projects to more than $500 billion.
Beijing has also announced a series of measures in recent months aimed at boosting economic activity, including rate cuts and the easing of some restrictions on home purchases. CCTV reported that Wednesday's announcement by China's Ministry of Finance, the national tax authority and the Ministry of Housing and Urban-Rural Development aimed to clarify “various tax incentives to support the real estate market”. CCTV also clarified that “the minimum rate of prepayment of land value added tax will be reduced to alleviate the financial difficulties of real estate companies”.
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