China’s two biggest cities announced new restrictions on housing sales over the weekend, as authorities followed through on earlier announcements that steps would be made to cool the country’s property market. From David Barboza at The New York Times:
In the nation’s capital, the Beijing municipal government said that unmarried individuals would now be allowed to purchase only one residence. The city also increased the minimum down payment for buyers of a second home and imposed a 20 percent capital gains tax on owners’ selling a residence.
In Shanghai, an identical capital gains tax was announced and took immediate effect, and city officials pledged to install and enforce other measures aimed at stabilizing housing prices. The stiffer capital gains taxes take the place of a 1 percent to 2 percent transaction tax that was previously assessed on the final price of the property being sold.
The announcements came weeks after China’s State Council, or cabinet, said the government would take stronger action to ensure that property prices do not continue to soar, fueling what many analysts believe is a real estate bubble that could seriously damage the economy and exacerbate social tensions between the rich and the poor.
Esther Fung and Richard Silk reported that anxious buyers and sellers filed into property sale centers in Beijing and Shanghai on Monday to seek answers about the new regulations:
Homeowners and sales agents on Monday quizzed local officials about the details and how they might hurt sales. “I hope the seller doesn’t go back on his word,” said one home buyer, who gave her surname as Hong, at a transaction office in Shanghai, adding, “I’m not sure if the tax needs to be paid.”
At a transaction office in Beijing’s Chaoyang district people jostled their way to the front of a line for information on the new rules. Many feared sellers would pass the 20% levy straight on to them.
“It’s just this tax,” said a woman holding a baby. She gave her English name, Katie, and said she was hoping to buy a first home with her husband. “We’re so worried about this tax.” The official at the end of the line brusquely referred all questions on the issue to the tax office on the next block.