China’s Ministry of Finance and State Taxation Administration announced that starting from 2026, for individuals selling residential properties purchased less than 2 years, the VAT levy rate will be reduced from the previous 5 percent to 3 percent. Properties held for two years or more will be exempt from VAT.
China’s real estate industry has been in a prolonged downturn, exerting a negative impact on the steel industry. MOF and STA’s measures target to stimulate transaction activities in real estate sector.
These measures are the last ones in a series of measures announced by the Chinese authorities this month, including encouraging government institutions buying of existing housing stock for the local government program of affordable housing.