SteelOrbis Shanghai
Chinese Premier Wen Jiabao has called for healthy development of the country's real estate market at a recent executive meeting of China's State Council.
A document released after the meeting said the recently-adopted policies aimed at expanding domestic demand and stimulating the economy were having a positive impact on the property market, with business picking up in some cities.
At present, according to the document, efforts should be made to maintain market-oriented real estate development, to step up the building of houses for low-income families, encourage housing purchases and keep up a reasonable scale of real estate development.
The document said local governments will in three years build houses for 7.5 million low-income families in urban areas, and also build houses for 2.4 million households living in shanty towns in forests, reclamation areas and coal mining areas. The local governments will also continue renovating old buildings in rural areas.
The central government will continue to finance building and renovation projects, to offer higher subsidies for the less-developed central and western regions and to carry out pilot projects in some areas to test the feasibility of supporting construction with idle funds in local housing provident fund accounts.
In a bid to encourage house purchases, second-home buyers, with per capita room-at-home lower than the local average, are to be allowed to avail of the favorable policies enjoyed by first-time house buyers.
Tax on house purchases will also be reduced next year. Homeowners who had lived-in for more than two years will be exempted from the transaction tax which had been levied on all houses lived-in for less than five years. For those who had lived-in for less than two years, the tax will be calculated from the transaction price minus the original price.
According to the document in question, banks are encouraged to lend to developers of low-price apartments, especially those already under construction, and offer services for mergers by trustworthy developers.
Finally, the central government insists that local authorities keep a close eye on the real estate market, that they deal with newly-arising problems in time and step up supervision of construction projects in terms of subsidy use and quality issues.