China’s State Council announced plans Wednesday to curb property speculation and reduce tax breaks on car purchases, Bloomberg reported. The two-year period in which homeowners are liable for tax should they sell their properties will be extended to five years, an exact reversal of a policy introduced in January. Beijing has said it is keen to bring real estate under control after house prices in 70 major Chinese cities grew 3.9% year-on-year in October, the fastest pace in 14 months. Meanwhile, preferential tax rates for purchases of vehicles with engines of 1.6 liters or below – seen as a key driver of China’s auto industry revival – will be reduced. The sales tax was cut from 10% to 5% in January but it will go up to 7.5% in 2010. However, subsidies will be expanded for alternative energy and energy efficient cars, trading in older cars and vehicle purchases in rural areas. This is said to be in keeping with plans to boost domestic consumption.
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