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    The property market is loose? Housing transaction tax cuts

    2019-03-11 12:41:04

    Chinese entrepreneur Li Yanyan

    The halving of the value-added tax on housing transactions, etc., caused the sensory effect of “suddenly the spring breeze, the blossoms of thousands of trees and pears”, and the macro-control was loosened into a high expectation state.

    On March 7th, all the major agencies in Beijing and Shanghai informed the inside of a message that the relevant housing transaction tax will be lowered from the same day, including the stamp duty of real estate transaction contract and the urban maintenance and construction tax in the VAT surcharge. And the education additional tax rate is basically reduced by half.

    For example, in Shanghai, the value-added tax and surcharges for personal sale of houses are 5.3%, which is subject to tax payment time; the date of contract for personal non-residential homes is after January 1, 2019, and the stamp duty is reduced from 0.05% to 0.025%. .

    The situation in Beijing is similar, except that the original VAT and additional tax rate of 5.55% is adjusted to 5.3%, and the original relevant tax rate of 5.45% is adjusted to 5.25%.

    On the evening, employees of Shenzhen and Guangzhou chain companies confirmed the news about “Personal Transaction Housing Value-added Tax and Additional Tax Rate Reduction Policy” for “Chinese Entrepreneur”. The 12366 service hotline staff of the taxation departments of Beijing and Shanghai also said that the current local individual sales tax rate for housing sales was reduced by half. For the second and third tier cities such as Wuhan, Tianjin, Yantai and Qingdao, local chain employees said that they have not received detailed measures.

    After the “tax reduction” policy came out, Ni Yizhen, chief analyst of Zhongtai Securities, said that tax cuts in the real estate sector were affected by the tax cuts of the entire social system, and the tax cuts were not large taxes, but had little effect on transaction costs, but Stimulating housing transactions has a positive effect.

    Take Shanghai as a case with less than two years and a total price of 3 million houses. The seller is required to pay VAT and surcharge: 3000000/1.05×5.6%=160,000 yuan, and now only pay 3000000/1.05×5.3%=151428.6 yuan. A total of about 8571.4 yuan was saved.

    However, in the context of the city's policy, this kind of national preferential policy has at least caused the sensory effect of “suddenly the spring breeze, the blossoming of thousands of trees and pears”, and the macroeconomic regulation and control has been loosened into a high expectation state.

    In fact, the loosening has begun. In March, on the eve of the two sessions, individual cities and banks showed partial reductions in down payment and partial relaxation of mortgage interest rate cuts. For example, on March 1, ICBC Wuxi Branch issued a notice to the branches and branches of the sales department that the households purchased ordinary housing for the first time to apply for personal housing loans, and the minimum down payment ratio was reduced to 30%.

    Loose regulation

    As early as the end of the year, the “restricted purchase” or “restricted sale” policies of many cities have already ushered in. Shandong Heze first explicitly proposed to cancel the restrictions on sales, and started the "first shot" of the property market. Then, many cities have relaxed restrictions on home purchases.

    On January 3, the Qingdao Municipal Bureau of Land Resources and Housing Authority High-tech Zone issued a notice to suspend the “shake house sales” rule. On January 10th, Zhuhai City proposed to speed up the improvement of the public employment service system for the development of Hong Kong and Macao personnel in Zhuhai, and explore ways to relax the restrictions on Macao residents in purchasing houses. In addition, Wuhan, Nanning and other cities have partially relaxed the price limit, and many cities have lowered the mortgage interest rate.

    In fact, this regulation has been loosening since the fourth quarter of last year. At the end of December 2018, Guangzhou City issued the latest regulations, which can be used to purchase housing funds from different places to purchase houses; almost at the same time, Foshan City canceled the minimum entry conditions for purchase. Central Plains real estate statistics show that in the past February, real estate control policies across the country have been issued 21 times.

    Interestingly, “stopping down” has also become the subject of regulation in some cities. On March 6th, some media confirmed that the Housing and Urban-Rural Development Bureau of Yinxian District, Ganzhou City, Jiangxi Province had issued a notice to the housing enterprises to “stop selling special room sales” and asked the housing enterprises to stop the “special room” below the declared price. "Sales. According to insiders, the sale of special rooms was stopped because the selling price was lower than the previously announced pre-sale price.

    “The purpose of the purchase restriction is to limit speculation. Since the speculators have fully ebbed, relaxing the purchase restriction has become the first choice for the policy of steadily increasing the volume. For example, lowering the entry threshold, lowering social security conditions, and lowering the talent standards will increase market turnover.”New Town HoldingsSenior Vice President Ouyang Jie said.

    After 22 consecutive rises and one draw since the beginning of 2017, the bank mortgage interest rate began to decline in December last year. Although the rate of mortgage reduction is not large, the trend of inflection point is already obvious. As a result, the outside world has thrown the view that the central bank will lower the standard, the mortgage will cut interest rates, and China’s real estate regulation will be biased toward easing.

    Since January, local governments have held local meetings and conferences, and many cities have introduced new interpretations of real estate regulation and control policies. According to statistics from Zhongyuan Real Estate, there are as many as 68 contents of the two sessions on real estate policies and other property market policies. Immediately following the RRR cut, the interest rate on mortgages began to decrease. The local governments have introduced the unbundling policy. In addition, the recent “tax reduction and fee reduction” boost to the property market means that real estate regulation has begun to loosen?

    “Surely,” said Cui Xiucheng, a senior analyst at the Kerry Research Institute, to China Entrepreneur. In the past two years, real estate in all cities across the country has generally implemented stricter control policies, which has brought difficulties and pressures to the economy of some cities. Moreover, most cities are subject to follow-up regulation, and in fact cannot solve specific problems.

    Cui Xiucheng also said that in December 2018, the Ministry of Housing and Urban-Rural Development proposed to adhere to the city's policy and classification guidance, consolidate the city's main responsibilities, strengthen market monitoring and evaluation, and effectively implement the responsibility of stabilizing prices and stabilizing housing prices, which means that the city must Take the main responsibility, stabilize the price and stabilize the price stability, and prevent the housing price from rising and falling, especially to prevent the expected change.

    "(Regulation) will gradually relax." Ouyang Jie said to "Chinese Entrepreneur", "However, relaxation will not necessarily increase prices. On the one hand, the market is currently under downward pressure, on the other hand, if it really wants to rise, Will fall over and limit it."

    "Beijing is also fine-tuning." A TOP10 housing company executive who did not want to be named said to "Chinese entrepreneurs." In its view, Beijing’s policy loosening is closer to something “quietly tempted”. Of course, "excessive policies have also been stopped, such as Haikou and Hefei."

    On January 9, the official website of the Beijing Municipal Planning and Natural Resources Commission released the first land transfer pre-application announcement in 2009. The announcement mentioned that the two residential sites in Sunhe, Chaoyang District, are intended to be listed for sale in the near future. This is the last two residential land of the Sun River Group. However, unlike the commercial residential plots that have been sold in most of Beijing in the past two years, these two plots do not set the sales price of future homes.

    The land transfer method of “limited house price and competitive land price” was proposed in Beijing’s “930 New Deal” in 2016. After that, a series of strict control policies such as purchase restriction, loan restriction, and restricted sales were offered, and the market quickly cooled down. In the past two years, there have been many land auctions in Beijing. Some people said with emotion, "Beijing's regulation and control is too strict. Not only can buyers not buy or buy houses, developers are afraid to take the land."

    At least three TOP10 housing company executives showed interest in the aforementioned plots, but interest was cautious. “The floor area ratio is low, the land price is high, and market confidence needs to be restored. But whether the policy will be repeated will remain to be seen,” said one of the housing company executives.

    Market eager to loosen

    "This year's business is better than last year, and the transaction volume is much more." A second-hand house broker of the Beijing chain family expressed his feelings to reporters. Her judgment is based on the number of single-day online signings in Beijing. "More than 200 last year, more than 280 this year." Now coincides with "Golden Three Silver Four", she has been watching outside on the weekends, and the customer's confidence in buying a house is sufficient.

    Guosen SecuritiesAccording to a study conducted in March this year, sales in the real estate industry continued to cool down, and the volume of commercial housing transactions declined overall. The sales in first-tier cities increased year-on-year, and the growth rates in second- and third-line sales were significantly different. It will also set the market risk as “the real estate industry cools beyond market expectations and the policy is not warming up”.

    "Some cities have followed the regulation of the wind, and there have been serious phenomena such as serious land flow, low prices, and severe market downturns. This is obviously inconsistent with the overall work requirements put forward by the Ministry of Housing and Urban-Rural Development, and it is necessary to adjust the market in time." Cui Xiucheng said. The data shows that in 2018, the number of land flows in the country reached 1,808, an increase of 93.16%. The number of shots in some first-tier cities has broken the record of nearly ten years; the number of shots in the third- and fourth-tier cities far exceeds the sum of the first and second lines.

    In his view, relying on land finance has become a common problem in cities. "After more than two years of strict regulation, local cities will have stronger desires for the loosening of regulatory policies. Under the serious downward trend of the market, there will certainly be many tentative actions. When some tentative actions are not stopped, they will More and more cities are joining to present a partial to full relaxation."

    "It is worth noting that China's current principle of the real estate market is still housing and not speculation, so there is no political space for housing prices to rise." Cui Xiucheng said.

    "Housing is a problem of people's livelihood. The housing system related to stable housing prices should have relative stability. It should not be changed. Real estate is an important force driving economic growth and promoting urbanization. It must correctly handle real estate and urbanization and economic growth. The relationship, the development of real estate should be moderate, and it is necessary to make the people's life more livable and suitable." Zhao Xiuchi, vice president of the Beijing Real Estate Law Society, believes.

    Wei Dong, head of research at DTZ, China, said: "Under the central government's constant emphasis on the steady growth of the real estate market and the risk prevention, excessive and excessive growth will deviate from the central government's general policy."

    But not all cities are following the trend of “restricting” politics. According to the "Securities Daily", on March 7, during the meeting of the Hainan Provincial delegation of the second session of the 13th National People's Congress, the relevant persons present said that Hainan is effectively regulating the real estate market and implementing the most restrictive purchases in the whole world. Real estate regulation and control, officially canceled the assessment of GDP and fixed assets investment in two-thirds of the province's cities and counties, to ensure that cities and counties do not blindly invest in projects simply to pursue GDP growth.

    It is worth noting that although “the house does not speculate” has disappeared from the government work report, in the financial sector, it is still cautious about real estate investment.

    On March 9, Wang Zhaoxing, vice chairman of the China Banking Regulatory Commission, said in an interview that strengthening the monitoring of real estate loans, strengthening strict control over speculative real estate loans, and preventing entry into real estate through shadow banking channels must ensure the healthy and stable development of real estate. To continue to protect the basic needs of housing loans, but also to strictly control investment and speculative loans, real estate finance is a key area to prevent risks.

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