The Chinese government has announced tax reliefs for residential property leasing operators as part of its efforts to support the growth of real estate and housing sub-sector of the nation’s economy.
The latest fiscal measure by the government was jointly made by the country’s Ministry of Finance, State Administration of Taxation, and Ministry of Housing and Urban-Rural Development through the issued Announcement No. 24 of 2021.
According to the government, the implementation of the Announcement No. 24 of 2021 will become effective from 1 October this year.
A news report by obitax.com, an online medium with editorial focus on fiscal issues, indicated that the announcement provided that enterprises engaged in residential property leasing that are general taxpayers for VAT purposes may opt to apply the simplified method for all rental income from leasing residential property to individuals and apply a reduced VAT rate of 1.5%, down from 5%.
In addition, the fiscal measure also provides that for small-scale taxpayers, the 1.5% rate applies directly with no need to opt for the simplified method and reduced rate.
Similarly, enterprises and certain other entities are provided a reduced 4% residential property tax rate on rental income, down from the 12% normal rate.
