How to calculate the construction and installation cost of government repurchase of affordable housing

How to calculate the construction and installation cost of government repurchase of affordable housing

Because there are different treatment standards in the implementation process of local tax bureaus, this drawing is for reference only, and the results confirmed by local tax authorities shall prevail.

There are two common forms for housing enterprises to build affordable housing. One is to give it to the government for free after completion, and the other is to buy it back by the government after completion. However, there is also a relatively rare real estate enterprise applying for capital construction.

Upon completion, it will be handed over to the government free of charge.

After the housing is completed, it will be handed over free of charge, that is, the government departments will no longer pay the price during the handover process, and the construction cost of affordable housing will be covered by the overall income of the development project.

At present, there are several views on the tax treatment of this distribution form:

1. As a public distribution, it does not count as income: Some people think that housing enterprises only allocate affordable housing, but they do not own it, and there is no property right registration or change, so there is no property right transfer;

In addition, in terms of economic form, the allocation of affordable housing needs to generate construction costs, which are paid, so it should not be considered as free transfer, but should be treated as public facilities.

In this case, the investment calculation is relatively simple, and the construction cost of affordable housing can be included in the pool and the relevant tax calculation can be carried out, regardless of the value of affordable housing.

2. Regarded as sales: As the property rights of real estate enterprises are transferred to the government after the house is completed, it is an act of developing products in exchange for non-monetary assets. Since there is no public welfare after the house is handed over to the government, it should be regarded as sales.

In the calculation, it is necessary to increase the product format of affordable housing first, and the scheme and priority order when calculating the value income are as follows:

(1) Determine the market sales price of similar products developed by this project (for example, the price of high-rise residential buildings in this project is 8000 yuan/square meter, and the construction of high-rise affordable housing in residential areas is regarded as sales at 8000 yuan/square meter);

(2) refer to the fair value of local similar products market; (3) Profit rate by product cost, that is, construction cost+cost profit rate (generally not less than 15%).

Secondly, because the unpaid transfer part is regarded as the sales value, but not paid in, in order to form a logical closed loop in the calculation table, the corresponding value of affordable housing can be regarded as the composition of land acquisition consideration, and the compensation for demolition in the land cost subject can be regarded as the calculation of land acquisition cost, as well as the deduction of land tax increase and value-added tax output.

The construction cost corresponding to the affordable housing is normally considered in the main construction and installation subjects, and the income tax can also be deducted and deducted; Due to the transfer of sales property rights, the deed tax needs to be paid normally.

Reference documents:

Articles 14 and 44 of the Notice of State Taxation Administration of The People's Republic of China of the Ministry of Finance on Comprehensively Promoting the Pilot Project of Changing Business Tax to VAT (Caishui [2065438+06] No.36).

Articles 7 and 27 of the Notice of State Taxation Administration of The People's Republic of China, People's Republic of China (PRC) on Printing and Distributing the Measures for Handling the Income Tax of Real Estate Development Enterprises (Guo Shui Fa [2009] No.365438 +0).

Articles 3 and 4 of the Notice of State Taxation Administration of The People's Republic of China on Issues Concerning Land Value-added Tax Liquidation Management of Real Estate Development Enterprises (Guo Shui Fa [2006] 187).

3. It is considered as sales without deducting the cost.

If the cost is not deducted from the deemed sales, it is confirmed that the collection is consistent with the deemed sales. The main difference is that the cost cannot be deducted, so the tax burden of various taxes is obviously increased.

However, this situation is relatively rare, and local governments will also appropriately reduce the tax burden of housing enterprises and deduct them in compliance.

Government repurchase

Some people think that the government repurchase price will be significantly lower than the market price, and the price may be adjusted when calculating taxes, which may lead to the risk of tax increase.

According to the practice of most projects, because the government generally agrees to buy back affordable housing when taking land, it will clearly indicate the repurchase price in the land transfer contract;

Therefore, although the selling price is lower than the market price, there are reasonable reasons for not adjusting taxable value due to the increase of value-added tax and land tax.

There is also a view that developers build affordable housing in accordance with the requirements of the construction agreement. After the project is completed, the government pays the project cost price, which is equivalent to the developer's advance payment for the government. There is no actual sale of real estate to the government, there is no taxable behavior, and there is no need to pay VAT.

Due to the low repurchase price of the government, the format of affordable housing will produce negative value in the settlement of land tax increase. If the affordable housing is within the red line, it can be merged and liquidated with other saleable standard properties of the project to digest the negative value-added generated by its repurchase.

If it is outside the red line and cannot be merged, the negative value-added generated by it cannot directly deduct the project value-added amount.

In the actual calculation, it is suggested to adhere to the principle of pre-loosening without pre-tightening, calculate the commodity value normally according to the government repurchase price, accrue the value-added tax normally, and do not need to pay it for the time being. The land tax increase should be treated according to whether the project is actually built within the red line.

Reference documents:

Articles 14 and 44 of the Notice of State Taxation Administration of The People's Republic of China of the Ministry of Finance on Comprehensively Promoting the Pilot Project of Changing Business Tax to VAT (Caishui [2065438+06] No.36).

Article 18 of the Notice of State Taxation Administration of The People's Republic of China City, People's Republic of China (PRC) on Printing and Distributing the Measures for Handling Enterprise Income Tax of Real Estate Development Business (Guo Shui Fa [2009] No.365438 +0).

Capital construction

Construction with capital refers to the commercial housing project that the development enterprise thinks is not suitable for the construction of affordable housing and applies to the government on its own. With the approval of the government, the construction cost can be paid in capital according to the approved capital standard, and the construction task of affordable housing can be completed.

Approved capital standard = floor price of the plot+installation cost guidance price of residential comprehensive building.

Fund allocation fee = area of affordable housing to be allocated * unilaterally approved fund standard

When calculating, the fee can be included in administrative fees, and land value-added tax and income tax can be deducted.

However, the VAT deduction is controversial, depending on whether the local tax is allowed or not, and whether the tax-included invoice can be issued without paying the deed tax.

If there is no actual calculation before taking the land, it is suggested that the cost of affordable housing should be considered normally according to the requirements of allocation and construction in accordance with the principle of tightening first and not loosening later.

If we can win the construction with capital in the later stage, increase the construction cost with capital, and then turn the format of affordable housing into saleable commercial housing, it will increase the overall value of goods and make the project benefit index more impressive.

From the actual project, although the cost of infrastructure has increased, it has improved the overall value and profit of goods.

Even if you only bring capital to build educational facilities, the payment will generally be lower than the actual construction cost.