KNOWLEDGE|
1. |
Taxpayers |
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The taxpayers of Deed Tax are those enterprises, units, individuals who are the transferees of house property transferred within the territory of China. |
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| 2. |
Taxation Object |
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| 3. |
Tax Rate |
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Deed Tax adopts a flat rate within the range of 3%-5%. The applicable tax rate shall be determined by the people’s governments of provinces, autonomous regions and municipalities directly in accordance with the actual conditions of their respective areas within the scope prescribed in the preceding paragraph. |
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4. |
Tax Base |
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1) |
For the sale of State-owned land use right, land use right and houses, the tax base is the transaction price. |
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2) |
The grant of the land use right and the grant of the ownership of the house shall be subject to the approval of the tax collection authority with reference to the market price. |
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3) |
The tax base for exchange of land use right, exchange of ownership of houses shall be based on the difference of the exchange. Deed tax shall be exempted for same exchange price. Where the exchange price is not equal, the party who pays more money, physical assets, intangible assets or other economic benefits should pay deed tax; |
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4) |
After receiving the approval to transfer the real estate for the land use right given by the government’s order without paying, the deed tax shall be paid by the real estate transferor. The tax base is the charge for land use right transfer or land rise in value; |
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5) |
Tax base of deed tax for ancillary facilities: |
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a. The deed tax base for acquiring the building ancillary facilities land use right，housing ownership by installment payment method，is the total contract price; b. The tax rate shall be applied according to the local applicable tax rate if the ownership of the ancillary facilities of the house is priced separately; the tax rate shall be applied same with the house if the ownership of the ancillary facilities of the house is priced together. |
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6) |
Individuals transfer the real estate as gift (except the legal heir), the acceptor shall be subject to deed tax in full. |
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6. |
Major Exemptions and Reductions |
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1) |
General Provisions |
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a. |
The Deed Tax exemptions may be granted on the land and houses received by the Governmental organs, institutions, social organizations and military units for the use of offices, lecturing, medical treatment, scientific research and military facility; |
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b. |
The State-owned house purchased for the first time by employees in cities and towns in conformity with relevant rules; |
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c. |
Residential houses purchased as a result of house loss due to force majeure may be given tax reduction or exemption |
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d. |
The provincial government shall decide the tax reduction or exemption if the ownership of land and houses re-acquired after the people’s government at or above the country level occupied the land and houses; |
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e. |
The use right of barren mountains, barren gullies, barren hills and/or barren beaches received for use in agriculture, forestry, animal husbandry and/or fishery industry; and those diplomatic organizations and staff satisfying the relevant rules of tax exemption; |
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f. |
The foreign embassies, consulates and their diplomatic representatives in China who acquire the ownership of land and houses shall be exempted from deed tax; |
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g. |
The houses purchased by the public rental housing management units as public rental housing shall be exempted from deed tax; |
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h. |
The individuals purchase the only one family housing, the deed tax rate will be reduced to 1% if the area is 90 square meters or less; the deed tax rate will be reduced to 1.5% if the area is over 90 square meters. The individuals purchase the second family housing, the deed tax rate will be reduced to 1% if the area is 90 square meters or less. The deed tax rate will be reduced to 2% if the area is more than 90 square meters. |
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2） |
Special Provisions |
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a. |
Enterprise Restructuring For the overall restricting, the original investment entity survives and the proportion of equity held in the restricted enterprise exceeds 75%, and the restricted enterprise succeeds the rights and obligations of the original enterprise, the deed tax shall be exempted for the restricted enterprise acquire the ownership of the land and houses; |
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b. |
Reform of Public Institutions The original investment entity survives and the proportion of capital contribution in the restricted enterprise exceeds 50%, the deed tax shall be exempted for the restricted enterprise succeeds the ownership of the land and houses of original public institutions; |
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c. |
Company Merger Two or more companies are merged into one company and the original investment entity survives, the merged company shall be exempted from deed tax for the ownership of land and houses of the original merged parties; |
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d. |
Division of Enterprises The enterprise being divided into two or more enterprises which are invested by same investment entity in accordance with the provisions of law or contract, the deed tax shall be exempted for the ownership of the land and houses of original enterprise succeeded by the derivative enterprise and newly established enterprise; |
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e. |
Company Bankruptcy Creditors succeed the ownership of land and houses of bankrupt enterprises to offset the debt, the deed tax shall be exempted. The non-creditors succeed the ownership of land and houses, the deed tax shall be exempted if the non-creditors arrange the appropriate positions for all employees of the original enterprise according to the policy and sign the labor contracts with them with a service term of no less than 3 years |
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f. |
Assets Allocation The deed tax shall be exempted from those units that undertake administrative adjustment or transfer ownership of State-owned land or houses under the people’s government at or above the country level or the administrative department of State-owned assets. The transfer of land and house ownership between enterprises which are invested by the same investment entity, including between the parent company and its wholly-owned subsidiary, between the wholly-owned subsidiaries of the same parent company, between the sole proprietorship enterprise established by the same individual and the one-person limited company, shall be exempted from deed tax. |
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g. |
Creditor’s Rights to Equity Enterprises that have been approved by the State Council to convert creditor’s rights to equity shall be exempted from deed tax for the newly established enterprise after the conversion of creditor’s rights to equity succeed the ownership of land and houses from original enterprises |
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h. |
Equity Transfer of Company Units and individuals succeed the equity in equity transfer, and the ownership of company land and houses has not been changed, the deed tax shall not be levied. |
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Disclaimer All information in this article is only for the purpose of information sharing, instead of professional suggestion. Kaizen will not assume any responsibility for loss or damage. |
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