Notice On The Adjustments To The Policies Regarding Business Tax On Transfer Of Residential Properties By Individuals
22 December 2009
To the departments (bureaus) of finance and local taxation bureaus in all provinces, autonomous regions, municipalities and separately planned, the offices of the State Administration of Taxation in Tibet, Ningxia and Qinghai Province as well as the bureau of finance under the Xinjiang Production and Construction Force:
To maintain the healthy development of the property market, the policies regarding business tax on transfer of residential properties by individuals are, with the State Council's approval, announced as follows:
I. From 1 January 2010, individuals who in the open market sell non-ordinary residential properties within 5 years after such properties are purchased shall be fully taxed for business tax purpose; individuals who in the open market sell non-ordinary residential properties more than 5 years (inclusive of the fifth year) after such properties are purchased or ordinary residential properties within 5 years after such properties are purchased shall be taxed on the proceeds from the sale of such properties for business tax purpose; and individuals who in the open market sell ordinary residential properties more than 5 years (inclusive of the fifth year) after such properties are purchased shall be exempted from business tax.
II. The definitions of the aforesaid ordinary and non-ordinary properties, exemption procedures, time of purchase, issuance of invoices, evidence of taxable proceeds, acquisitions of properties other than purchase and other relevant tax rules are subject to the "Notice of the General Office of the State Council on Forwarding the Opinions of the Ministry of Construction and other Authorities on Effectively Stabilizing Prices of Residential Properties" (Guobanfa (2005) No. 26), "Notice of the State Administration of Taxation, Ministry of Finance and Ministry of Construction on Strengthening the Taxation on Properties" (Guoshuifa (2005) No. 89) and "Notice of the State Administration of Taxation concerning the Implementation of the Property Tax Policies" (Guoshuifa (2005) No. 172).
III. To properly maintain the fiscal and tax administration, unauthorized tax exemption and deduction must be eliminated and the problems that arise out of such elimination must be resolved immediately.
IV. From 1 January 2010, the "Notice of the Ministry of Finance and State Administration of Taxation on the Policies regarding Business Tax on Transfer of Residential Properties by Individuals" (Caishui (2008) No. 174) will become ineffective.
Ministry of Finance
State Administration of Taxation