Shenzhen to reduce tax on larger house transactions

SHENZHEN - Shenzhen in South China's Guangdong province on Tuesday became the latest major Chinese city to reduce taxes for transactions involving larger houses.

The city said in a notice that it will scrap the distinction between ordinary and non-ordinary housing starting on Dec 1, which will unify favorable tax policies for the two categories.

According to the notice, non-ordinary houses that have been owned for two years or more will enjoy the same tax exemption from 5-percent value-added tax (VAT) as ordinary homes during transactions.

In Shenzhen, non-ordinary housing usually refers to houses with building areas exceeding 144 square meters.

The announcement by Shenzhen follows similar moves by Beijing and Shanghai, another two first-tier cities in China, to eliminate the distinction between ordinary and non-ordinary housing.

China has rolled out a slew of measures to prop up its sluggish property market -- including cutting mortgage rates, lowering down payment ratios and relaxing purchase restrictions.

Amid the emergence of such pro-housing policies, China's property market displayed positive changes in October, in the form of narrowing price declines, stronger sales and improved market sentiment.

The decline in the prices of commercial residential homes in China's 70 large and medium-sized cities generally moderated on a month-on-month basis in October, the National Bureau of Statistics said last Friday.