Qin Hong, deputy research head at the Ministry of Housing and Urban-Rural Development said in an interview with the China Securities Journal that China is unlikely to cut property transaction taxes much further and will continue to curb housing purchases for the purpose of investment.
The government has shortened the lock-up period during which home owners are subject to a business tax if they resell their homes and said it would levy the tax on capital gains instead of the overall value of the sold property.
The changes were part of measures to support the ailing real estate market, a pillar of China’s economy which has been slowing from the impact of the global financial crisis.
Qin Hong said, ‘China has reduced the transaction taxes and fees significantly and there is now limited room for further cuts.’
Beijing has also repeatedly pledged to provide more affordable homes to accommodate its low-income population and plans to spend RMB900 billion($132 billion) in the next three years to build such homes.