Shenyang: The value-added tax exemption period for personal housing transfers is adjusted from 5 years to 2 years

On April 26, the Shenyang Real Estate Bureau’s official website announced that the Shenyang Real Estate Bureau and the State Administration of Taxation’s Shenyang Taxation Bureau issued the “Notice on Adjusting the Value-Added Tax Exemption Period for Personal Housing Transfers.”

The notice stated that in order to eliminate the adverse impact of the new coronavirus epidemic on normal production and life in Shenyang City, reduce the burden of people’s house purchase, and meet housing needs, after research, the value-added tax exemption period for personal housing transfers shall be implemented in accordance with national regulations. Adjusted from 5 years to 2 years. The notice will be implemented from the date of issuance, and the joint issuance department will be responsible for interpretation according to their job responsibilities.

Yan Yuejin, research director of the think tank center of a research institute, said that this policy means that the new value-added tax policy for second-hand houses implemented in 2021 has also begun to be relaxed, and the direction of similar relaxations is also worthy of attention.

Yan Yuejin said that Shenyang has clarified that the exemption period for second-hand housing transactions has been adjusted from 5 years to 2 years, which will objectively help reduce the cost of second-hand housing transactions.

In September 2020, nine departments including the Shenyang Real Estate Bureau jointly issued the "Notice on Further Promoting the Stable and Healthy Development of the City's Real Estate Market." At that time, the policy was clear, and the value-added tax exemption period for personal housing transfers was adjusted from 2 years to 5 years.

Yan Yuejin believes that Shenyang has abolished the policy of tightening value-added tax collection in 2020, and the relaxation of the policy is bound to have a positive impact on second-hand housing transactions. Some second-hand houses held for 2-5 years can also enjoy the advantage of VAT exemption for subsequent transactions, that is, they do not need to pay VAT. Value-added tax is a relatively large tax burden in second-hand housing transactions. Shenyang's policies can naturally reduce the transaction costs of second-hand housing and promote the activity of the second-hand housing market.

Yan Yuejin said that the "2 to 5" regulation on the value-added tax exemption period for second-hand houses is an important manifestation of the tightening of real estate policies in 2020. At that time, Shenzhen, Wuxi, Chengdu and Shenyang all successively introduced policies to tighten the value-added tax on second-hand houses. The purpose of such policies is actually to combat the speculation and trading of second-hand houses. Through the adjustment of the value-added tax exemption period for second-hand houses, the profit margin for short-term operations of second-hand houses is reduced. In other words, such policies were introduced at the right time. When the speculation of second-hand houses and houses in school districts is more obvious. Judging from the current performance of the real estate market, in fact, the second-hand housing market has indeed cooled down significantly, and if the exemption period for second-hand housing transactions is not adjusted, the value-added tax levied on some second-hand housing transactions will be relatively high, which will objectively make the second-hand housing Real estate transactions have stalled. Therefore, the Shenyang policy to promote the recovery of second-hand housing transactions from the perspective of taxes and fees has a strong signaling significance.

Yan Yuejin gave an example. The current price of second-hand houses in Shenyang is about 9,000 yuan/square meter. If the total price of a house is 1 million yuan, consider "a total price of 1 million yuan, holding for 3 years." "The second-hand house transaction situation, the value-added tax changes before and after the policy are: According to the old policy, it needs to pay value-added tax. Calculated based on the 5% tax rate, it needs to pay 50,000 yuan in value-added tax. According to the new policy, if it has been held for more than 2 years, there is no concept of value-added tax, which is equivalent to paying 50,000 yuan less value-added tax. In the actual process, this fee may be paid by the landlord or the next home owner, but in any case, similar tax exemptions will significantly reduce the transaction burden of second-hand houses.

The sales price changes of commercial housing in 70 large and medium-sized cities in March 2022 released by the National Bureau of Statistics show that the sales price of new commercial housing in Shenyang fell slightly by 0.4% month-on-month and remained the same year-on-year; second-hand housing in March The sales price decreased by 0.7% month-on-month and 1.5% year-on-year. The prices of new and second-hand houses in Shenyang have continued to decline, with the price of second-hand houses even falling below the level of the same period in 2021.