Top Biz News

House sales jump ahead of deadline

By Zhu Zhe in Beijing and Zhang Yu in Shanghai (China Daily)
Updated: 2006-08-02 08:39

Insiders expect a slowdown in second-hand property transactions across the country, after property owners rushed to finish deals on their housing units before yesterday's deadline to evade a tax increase.

Last Wednesday, the State Administration of Taxation announced that a 20 per cent individual income tax would be imposed on second-hand house sellers starting August 1. The number of such transactions in Beijing and Shanghai soared prior to the deadline.

On Monday, one day before the policy took effect, more than 500 people went to the local taxation bureau in Beijing's Chaoyang District to trade their houses, which was five times more than is ordinary, the bureau said.

On the same day in the capital's Haidian, Fengtai and Chongwen districts, the numbers of transactions increased by about 600 per cent despite the heavy rain.

"Nobody wants to pay the extra tax," said 54-year-old Chang Chunxia, who was waiting in the Chongwen taxation bureau.

She said her family had decided to buy a flat at Huashi Beili from a friend, but they had not yet finished the transaction. Under the new policy, she would have to pay an extra amount of 20,000 yuan (US$2,500).

"It's a large sum," she said. "We hope the transaction could be finished today so that the money could be saved."

Figures from the Hanyu Property Company in Shanghai show that the trading volume it handled from Thursday to Monday equalled the total of the other 26 days in July, reaching 160 apartment units.

The Shanghai-based Centaline Property Company also said its overall trading volume rose by 30 per cent to 40 per cent in the last five days. Trade volumes in its Pudong, Hongkou and Luwan branches saw a sharp increase of 50 per cent.