This Chinese city is relaxing tax rules on home sales

Dongguan is now the latest among mainland Chinese cities relaxing its property curbs as the country grapples with slower economic growth.

The city in Guangdong province now gives home owners more options in paying taxes on income made from selling residential property.

Sellers in Dongguan can now choose to pay just two percent of the total transaction price in addition to the option of paying a 20 percent tax on the increase in price of their property, Caixin Global reported.

Homeowners stand to reduce their taxes dramatically under the new policy. For example, selling a property originally worth CNY1 million (USD150,000) for CNY2 million would translate to just CNY40,000 in taxes instead of CNY200,000.

Levies on Chinese home sales largely depend on practices of local tax bureaus, even though both calculations have been made available nationwide by the State Administration of Taxation to house sellers since 2006.

Prior to this policy change, Dongguan was one of the major cities in China that clung to stringent levies on home sales. Guangdong’s provincial capital, Guangzhou, had earlier made similar changes on residential property taxation measures.

This leaves Beijing as one of a few holdouts in a wave of cities loosening property curbs to mitigate the weakening housing market.