The Ministry of Finance and the State Administration of Taxation of China announced that, starting in 2026, for individuals selling residential property acquired in less than 2 years, the VAT rate will be reduced from the previous 5 percent to 3 percent. Properties held for two years or more will be exempt from VAT.
China's real estate industry has been in a prolonged downturn, negatively impacting the steel industry. The MF and STA measures are aimed at boosting transaction activity in the real estate sector.
The measures are the latest in a series of measures announced by Chinese authorities this month, including encouraging government agencies to buy existing housing stock for the local government's affordable housing program.
