China is speeding up property tax legislation and aims to fully implement law-based taxation reform. Especially starting from 2020, China has rolled out a series of policies to promote a nationwide network of property information. How much do you know about property tax? Check our article to know more!
REAL ESTATE TAX
Owners of houses within cities, county towns, administrative towns and industrial and mining districts within China.
Subjects of Taxation (Base of Taxation)
Houses within cities, county towns, administrative towns and industrial and mining districts.
It is collected monthly and declared annually. In Guangzhou, the declaration period of the tax on the basis of the value is between October 1 to December 31 each year, the period of the tax on the basis of the rental income is the same as the tax period of VAT.
Taxes for self-occupied houses are calculated on the basis of the residual value:
Original cost * 70%~90% * 1.2%
(In Guangzhou, the residual value is counted as 70% of the original cost.)
Taxes for rented houses are calculated on the basis of the rental income:
Personal-owned residential houses: rental income (excluding taxes) * 4%
Others: rental income (excluding taxes) * 12%
Personal-owned houses for non-business use
Rental income of residential houses by public institutions
From January 1, 2019 to December 31, 2021, small-scale VAT taxpayers can enjoy a 50% cuts of taxes including real estate tax, urban and township land use tax, farmland occupation tax, resource tax, etc.
A small-scale taxpayer has spent 2.5 million yuan for an office for personal use.
The annual real estate tax payable = 2.5mln *70%*1.2% = 21k
Considering the preferential policy, the actual annual tax payable is 10.5k yuan.
URBAN AND TOWNSHIP LAND USE TAX
Entities and individuals that use land in cities, county towns, administrative towns and industrial and mining districts.
Subjects of Taxation (Base of Taxation)
Actual area of the land occupied by the taxpayer.
It is collected monthly and declared annually. The declaration period is between October 1 to December 31 each year.
From January 1, 2019 to December 31, 2021, small-scale VAT taxpayers can enjoy a 50% cuts of taxes including real estate tax, urban and township land use tax, farmland occupation tax, resource tax, etc.
In order to avoid overdue fines, we advise taxpayers to declare and pay the above-mentioned taxes in time.
If you have any questions about tax planning, please feel free to contact HACOS. HACOS Business Services provides one-stop business solutions, helping you develop your business and make money in China.
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