Mar. 25 – The Ministry of Finance and the State Administration of Taxation recently issued a notice clarifying who qualifies for tax incentives when purchasing ordinary housing for the first time.

The Circular on Deed Tax Policy Concerning Initial Purchases of Common Housing (Finance Circular [2010] No. 13) stipulates that for two or more individuals purchasing a maximum 90 square meters of ordinary housing, if any of the buyers has previously been recorded buying houses, the preferential property deed tax policy for first time purchases of ordinary housing will not apply to any of the buyers.

This preferential policy was put in place by the Ministry of Finance and the State Administration of Taxation on October 22, 2008 in an attempt to mitigate the tax burden on individual housing transactions. The Tax Policy Notice on the Adjustment of Real Estate Transactions (Finance Circular [2008] No. 137) lowers the temporary property deed tax rate to 1 percent for first-time individuals  purchasing ordinary housing at a maximum of 90 square meters.