New Law to Levy Tax on Home Sale Profits
By the end of March a new law will take effect that will levy a 20 percent tax on profits from home sales. Home transaction volume is likely to peak in March and according to a real estate expert home prices are not likely to decline once the new tax is adopted at least not on a short term basis.
A property agent said that the tax will have a greater impact on transaction that involves pre owned homes with market value that increased in the recent years. Although there is no official announcement has been made on when the tax will be officially implemented locally, sources hinted that it can be on the last week of March or early April.
The new tax is creating a chain reaction in the housing market, and property owners are shifting their business and are now focusing on selling new homes. Also owners of pre owned houses are turning to lease their homes instead of selling. A move that will place more rental housing onto the market, which will lead potential buyers to hesitate in buying homes and will continue to rent.
Real estate agents in border areas said that Shenzhen residents living in Hong Kong are in a rush to finalize home transactions who are in a hurry to buy homes before the new tax will be implemented.