Shanghai Announces Tax Cuts for Property Market

Shanghai has announced significant tax incentives to revitalize its struggling property market, becoming the first major Chinese city to implement such measures. Effective December 1, the city will eliminate the classification between 'ordinary' and 'non-ordinary' homes for tax purposes, reducing the VAT for properties held over two years. Residents will be exempt from VAT on properties sold after two years, while those sold within two years will incur a full 5% VAT. Additionally, the deed tax threshold will be raised, benefiting buyers of larger properties. This move aligns with broader efforts by Chinese authorities to stabilize the economy and boost demand in a sector that has seen declining prices and sales. Experts expect other 'Tier One' cities to adopt similar measures as the country seeks sustainable economic recovery.