After the business tax to VAT reform, will the tax paid increase or decrease?

According to the current policy, ordinary housing purchased for more than 2 years (including 2 years) is exempt from business tax; housing purchased for less than 2 years is levied full business tax; non-ordinary housing purchased for more than 2 years (including 2 years) Business tax is levied on the difference between the sales revenue of a house and the purchase price of the house.

Once the business tax is changed to the value-added tax, whether the tax exemption period will also be enjoyed, how to set it up becomes the key.

If there is no exemption period across the board, it will inevitably increase the tax burden on most transaction partners. The current business tax rate for second-hand housing transactions is mainly based on 5.5 or 5.6. Taking a property with a purchase price of 1 million yuan as an example, if the property is sold outside the exemption period for a premium of 300,000 yuan, the transaction is sold for 1.3 million yuan. According to the current policy, the business tax that needs to be paid is 1.3 million × 56 = 72,800 yuan. If the value-added tax collection standard of Assumption 11 is followed, 300,000 × 11 = 33,000 yuan will be required. The burden of VAT is less than the burden of collecting business tax.

But once the real estate price increases from 1 million yuan to 2.5 million yuan. According to the current business tax collection regulations, you need to pay 2.5 million × 56 = 140,000 yuan. If you follow the value-added tax collection standard of Assumption 11, you need to pay (250-100) × 11 = 165,000 yuan. At this time, the value-added tax collected exceeds the business tax.

Whether VAT increases or reduces the tax burden depends on the exemption period and tax rate. If it can be implemented according to the two-year business tax exemption period, it is still feasible. Judging from the purpose of the state's introduction of this policy, it is mainly to combat speculation in the market. It is more reasonable to use two years to determine the purpose of holding real estate.

(The above answers were published on 2016-03-25, please refer to the actual relevant current home purchase policies)

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