Tax Reform for Luxury Housing Planned
The city urban planning, land and resources commission will be conducting tax reform on luxury housing purchases and ownership. The reform is interpreted by the local housing industry as a mark for an implementation of a property tax. The reform will raise tax on buyers and owners of luxury housing such as villas and large commercial apartments. No details have been issued yet, though the news has already affected the local housing market.
Last month luxury housing developers began offering discounts, with several luxury properties in Nanshan district selling with an average price of 35,000 yuan per square meter dropping to 26,000 yuan per square meter just last month. These steep discounts proved successful as transactions for luxury housing have increased in several districts including Yantian, Nanshan and central Bao’an District.
Financial analysts are saying that the tax reform may affect middle-end buyers and will not affect high-end buyers. Furthermore it will take a long time for the tax reform to be fully implemented.
Currently the title deed tax rate on the city’s luxury housing is at 3 percent, which is double that of the ordinary housing rate. Odds of further increases in the transaction tax are relatively small, however, luxury home owners will be subjected to a higher tax.