+
Shanghai Cuts Real Estate Taxes to Boost Housing Market
Real Estate

Shanghai Cuts Real Estate Taxes to Boost Housing Market

Shanghai announced new tax reductions for real estate transactions, effective December 1, as part of efforts to revive its struggling property market. The city will remove the distinction between "ordinary" and "non-ordinary" housing, which had subjected larger properties to higher taxes.

Key changes include exempting residents from value-added tax (VAT) if they sell a property held for over two years. Additionally, the threshold for levying deed tax has been raised from 90 square meters to 140 square meters. For instance, the deed tax on a 10-million-yuan apartment will drop significantly from 300,000 yuan to 100,000 yuan.

These measures follow the central government's broader initiatives, including interest rate cuts and reduced down-payment requirements, to stabilize the real estate sector. Despite these efforts, resale home prices in Shanghai fell for the 16th straight month in October, down 6.7% year-on-year.

"Shanghai's tax cuts align with national policies to rebuild confidence in the housing market," said Bruce Pang, chief economist at JLL. However, Pang cautioned that reducing transaction costs alone may not ensure long-term recovery without addressing broader economic concerns and stabilizing housing price expectations.

The policy shift sparked significant discussion on Chinese social media, ranking as the second-most-read topic on Weibo. While some welcomed the changes, many expressed skepticism about their immediate impact on affordability and market recovery.

Economists anticipate that other cities may follow Shanghai's lead, introducing similar tax incentives in the coming weeks.

Shanghai announced new tax reductions for real estate transactions, effective December 1, as part of efforts to revive its struggling property market. The city will remove the distinction between ordinary and non-ordinary housing, which had subjected larger properties to higher taxes. Key changes include exempting residents from value-added tax (VAT) if they sell a property held for over two years. Additionally, the threshold for levying deed tax has been raised from 90 square meters to 140 square meters. For instance, the deed tax on a 10-million-yuan apartment will drop significantly from 300,000 yuan to 100,000 yuan. These measures follow the central government's broader initiatives, including interest rate cuts and reduced down-payment requirements, to stabilize the real estate sector. Despite these efforts, resale home prices in Shanghai fell for the 16th straight month in October, down 6.7% year-on-year. Shanghai's tax cuts align with national policies to rebuild confidence in the housing market, said Bruce Pang, chief economist at JLL. However, Pang cautioned that reducing transaction costs alone may not ensure long-term recovery without addressing broader economic concerns and stabilizing housing price expectations. The policy shift sparked significant discussion on Chinese social media, ranking as the second-most-read topic on Weibo. While some welcomed the changes, many expressed skepticism about their immediate impact on affordability and market recovery. Economists anticipate that other cities may follow Shanghai's lead, introducing similar tax incentives in the coming weeks.

Next Story
Infrastructure Urban

CSIR-NCL and Covestro Collaborate to Upcycle Polyurethane Waste

In a move towards sustainable plastic waste management, Pune-based CSIR-National Chemical Laboratory (CSIR-NCL) signed a Memorandum of Understanding (MoU) with Covestro (India) Private Limited on Wednesday to develop innovative upcycling technologies for polyurethane waste.Polyurethane is notoriously difficult to recycle, with current methods often proving inefficient, costly, and environmentally harmful. This collaboration aims to address existing challenges, including high energy usage and deterioration of material quality during recycling.Ashish Lele, director of CSIR-NCL, stated, “This p..

Next Story
Infrastructure Urban

Torrent Pharma Seeks CCI Approval for Rs 195 Billion JB Chemicals Deal

Ahmedabad-based Torrent Pharmaceuticals has sought clearance from the Competition Commission of India (CCI) to acquire a majority stake in J B Chemicals and Pharmaceuticals in a Rs 195 billion deal.Upon completion, Torrent Pharmaceuticals will become India’s second most valuable pharmaceutical company.The move follows Torrent’s June announcement to acquire a majority stake in J B Chemicals for Rs 195 billion.“The proposed combination pertains to the acquisition of shareholding by Torrent Pharmaceuticals Ltd in J B Chemicals & Pharmaceuticals Ltd, followed by the merger of the target ..

Next Story
Infrastructure Energy

ONGC Partners with bp to Explore Offshore Basins in India

State-owned Oil and Natural Gas Corporation (ONGC) on Thursday signed a strategic Memorandum of Understanding (MoU) with bp plc to collaborate on drilling stratigraphic wells in India’s Category II and III offshore sedimentary basins: Andaman, Mahanadi, Saurashtra, and Bengal.This partnership aims to enhance geological understanding and unlock untapped hydrocarbon potential, thereby strengthening India’s long-term energy security, ONGC stated.The MoU was signed in the presence of Oil Minister Hardeep Singh Puri during the Urja Varta 2025 event, reaffirming the government’s commitment to ..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?