Beijing Raised The Land Value-Added Tax Rate To 2%

Beijing Municipal Construction Commission, Municipal Finance Bureau and city Land tax The Bureau recently issued a joint notice to land the majority of real estate projects. Value added tax The advance rate was raised from 1% to 2%, and the implementation date was from October 1, 2010.

The notice said that the real estate development enterprise Sales of economically affordable housing, limited price commodity housing and other affordable housing income will not be imposed on land value-added tax. However, real estate development projects with a floor area ratio of less than 1 will be required to levy land value added tax in accordance with 3% of sales revenue. Other real estate development projects are unified according to 2% of sales revenue.

All along, China's land value-added tax has a low rate of advance, and does not match the rapid rise in housing prices. To this end, in May 25th of this year, the State Administration of Taxation issued the notice on strengthening the administration of land value-added tax, delimiting the minimum limit for land value-added tax. Except for affordable housing, the rate of levy in the eastern provinces should not be less than 2%, the central and northeast provinces should not be less than 1.5%, and the provinces in the western regions should not be less than 1%, and all localities should be determined according to different types of real estate.

The industry believes that the increase in land value-added tax rate will further shrink the developer's money, increase the cost of real estate tax, and force real estate companies to adjust the speed and price of housing, thereby enhancing the effectiveness of real estate regulation. Beijing Zhongyuan Real estate analysts believe that the land value-added tax rate doubled, so that the cost of developers will increase by more than 1 percentage points.