C
hina's new tax policies aimed at stabilizing the real estate market have yielded significant results in their first month of implementation. According to data from the State Taxation Administration, these measures led to 11.69 billion yuan (approximately $1.6 billion) in tax reductions and exemptions.

    The policies, which took effect on December 1, 2024, focus on three key areas: expanded deed tax benefits, incentives for second home purchases, and value-added tax exemptions. One notable change is the increase of the area threshold for homes eligible for a lower 1 percent deed tax rate from 90 to 140 square meters. This adjustment resulted in 6.5 billion yuan in tax cuts and benefited over 1.4 million households.

    These households accounted for nearly 90% of all families receiving deed tax breaks, a significant increase of 14.4 percentage points from before the policy implementation. In major cities like Beijing, Shanghai, Guangzhou, and Shenzhen, second home purchases are now eligible for deed tax benefits, resulting in 2.58 billion yuan in tax reductions.

    Additionally, individuals transferring homes in these four cities that have been owned for at least two years no longer face a distinction between ordinary and non-ordinary residences when it comes to value-added tax exemptions. This change led to 2.61 billion yuan in new tax exemptions and saw the number of home transfers in these cities jump by 71% in December 2024 compared to the previous month.