Shenyang: The exemption period of individual housing transfer value-added tax is adjusted from 5 years to 2 years.

On April 26th, official website, Shenyang Real Estate Bureau, announced that Shenyang Real Estate Bureau and Shenyang Taxation Bureau of State Taxation Administration of The People's Republic of China issued the Notice on Adjusting the VAT Exemption Period for Individual Housing Transfer.

According to the notice, in order to eliminate the adverse impact of the COVID-19 epidemic on normal production and life in Shenyang, reduce the burden of people buying houses and meet the housing demand, after research, the exemption period of individual housing transfer value-added tax shall be implemented according to state regulations, and adjusted from five years to two years. This notice shall be implemented as of the date of promulgation, and the Joint Publishing Department shall be responsible for the interpretation according to its work responsibilities.

Yan Yuejin, research director of the think tank center of Yiju Research Institute, said that this policy means that the new value-added tax policy for second-hand houses implemented in 202 1 has also begun to relax, and similar relaxation trends are also worthy of attention.

Yan Yuejin said that Shenyang's clear adjustment of the inspection-free period of second-hand housing transactions from 5 years to 2 years will objectively help reduce the transaction cost of second-hand housing.

In September 2020, Shenyang Real Estate Bureau and other 9 departments jointly issued the Notice on Further Promoting the Stable and Healthy Development of the Real Estate Market in our city. At that time, the policy was clear, and the exemption period of individual housing transfer value-added tax was adjusted from 2 years to 5 years.

Yan Yuejin believes that in 2020, Shenyang cancelled the policy of tightening the collection of value-added tax, and the re-relaxation of the policy is bound to have a positive impact on second-hand housing transactions. Some second-hand houses that have been held for 2-5 years can also get the advantage of being exempt from value-added tax in subsequent transactions, that is, there is no need to pay value-added tax. Value-added tax is a relatively large tax burden in second-hand housing transactions. Shenyang policy can naturally reduce the transaction cost of second-hand housing and promote the activity of second-hand housing market.

Yan Yuejin said that the "2 to 5" second-hand housing VAT exemption period is an important embodiment of the tightening of real estate policy in 2020. At that time, Shenzhen, Wuxi, Chengdu and Shenyang all successively introduced policies to tighten the value-added tax on second-hand houses. The purpose of such policies is actually to crack down on speculation and transactions in second-hand houses. By adjusting the exemption period of value-added tax for second-hand houses, the profit margin of short-term operation of second-hand houses will be reduced. In other words, the introduction of such a policy at that time coincided with the obvious speculation of second-hand houses and school districts. Judging from the current performance of the real estate market, in fact, the second-hand housing market has obviously cooled down. If the tax exemption period of second-hand housing transactions is not adjusted, the value-added tax levied on some second-hand housing transactions will be relatively high, which will objectively stagnate the second-hand housing transactions. Therefore, Shenyang policy has a strong signal significance to promote the recovery of second-hand housing transactions from the perspective of taxes and fees.

For example, Yan Yuejin said that the current price of second-hand houses in Shenyang is around 9,000 yuan/square meter. If the total price of a house is 6,543.8+0,000 yuan, considering the second-hand housing transaction with a total price of 6,543.8+0,000 yuan, the change of value-added tax before and after the policy is that value-added tax needs to be paid according to the old policy, and 50,000 yuan needs to be paid according to the tax rate of 5%. According to the new policy, holding for more than 2 years without the concept of value-added tax is equivalent to paying 50 thousand yuan less value-added tax. In practice, this fee may be paid by the landlord or the next family, but in any case, similar tax relief will obviously reduce the transaction burden of second-hand houses.

According to the changes in the sales price of commercial housing in 70 large and medium-sized cities in March 2022 released by the National Bureau of Statistics, the sales price of new commercial housing in Shenyang decreased slightly by 0.4% in March, which was the same as that of the same period last year. In March, the sales price of second-hand houses decreased by 0.7% month-on-month and 1.5% year-on-year. The prices of new and second-hand houses in Shenyang are declining, and the prices of second-hand houses have even fallen below the same period level of 202 1.