An aerial drone photo shows the Bai'etan Greater Bay Area Art Center under construction in Guangzhou, south China's Guangdong Province, Dec. 27, 2023.
The southern Chinese metropolis of Guangzhou, Guangdong Province, announced on Friday that it will reduce taxes on transactions involving larger housing units, aligning with similar measures adopted earlier by Beijing, Shanghai and Shenzhen.
Starting Dec. 1, the city will scrap the distinction between ordinary and non-ordinary housing, according to an official notice. This means that tax benefits previously reserved for ordinary homes will now apply to non-ordinary homes as well.
Under the new rules, non-ordinary housing units, defined in Guangzhou as those with a building area exceeding 144 square meters, that have been owned for at least two years will be exempt from the 5.3 percent value-added tax (VAT) during transactions.
Guangzhou's decision follows similar initiatives in other major cities, signaling a coordinated effort among China's four first-tier cities to simplify housing taxation policies and support the property market.
China has introduced a series of measures to stimulate its slowing real estate sector, including cutting mortgage rates, reducing down payment requirements, and relaxing purchase restrictions.
These policies appear to be yielding results. In October, China's property market showed signs of recovery, with narrowing price declines, stronger sales and improved buyer sentiment. The National Bureau of Statistics reported last week that the decline in prices of commercial housing across 70 large and medium-sized cities moderated on a month-on-month basis.