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China Cuts Home Taxes in Expansion of Efforts to Clear Glut

  • Ministry of Finance says it will cut deed and business taxes
  • Mortgage down payment requirement was eased two weeks ago
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China’s Ministry of Finance said it will cut taxes on home transactions as it steps up support for the property market, after the central government eased mortgage down payment requirements to the lowest level ever earlier this month.

China will set the deed tax at 1.5 percent of the home’s value for first residences bigger than 90 square meters (969 square feet) and at 1 percent for those smaller than that size, the ministry said in a statement on its website on Friday. Homeowners that live in cities other than the four first-tier ones including Beijing, Shanghai and Shenzhen will also be exempt from paying a business tax on properties sold after two years of purchase. The new rules will be effective as of Feb. 22.