Introduction: in the course of moving the property, the main taxes involved are stamp duty, deed tax, value added tax and its attachment, land value added tax, personal income tax, which varies according to the type of house, the way in which it is traded, and the time and area of purchase. The tax on inheritance, gifts and sale of houses is analysed one by one。
01
Form of succession
For example, xiaoming's mother had a common dwelling in her name, and after her death, xiaoming had inherited it by law, which was known to be 100 square metres, and the minimum tax rate approved by the authorities was $0. 9 million
Tax calculations
As a legal heir, ming is exempt from vat and its surcharges, as well as from deed tax, land value added tax and personal income tax. Ming is subject to stamp duty。
Stamp duty (transfer of title) = 900,000 x 0. 05 per cent x 50 per cent = 225 yuan
Tax policy
Value tax
Tax exemption
In the event of the death of the owner of the property, the legal heirs, the heirs of the will or bequests are legally entitled to the property and are exempt from vat。
Policy basis:
Circular of the ministry of finance, general directorate of national revenues on the full roll-out of the vat conversion pilot (customs 2016) no. 36)
Land value tax
Non-tax provisions
Land value added tax (vat) is not levied on transfers of real estate by inheritance on a pro bono basis。
Policy basis:
Rules for the implementation of the provisional regulations of the people's republic of china on land value added tax (final law) [1995] no. 6)
Taxes received by individuals
Non-tax provisions
In the event of the death of the owner of the home, the legal heir, heir to the will or bequest who acquired the property in accordance with the law. No personal income tax is levied on the parties。
Policy basis:
Circular of the ministry of finance of the general directorate of state taxes on personal income tax issues in respect of non-reimbursable properties granted to individuals (fiscal) [2009] no. 78)
Taxes
Taxable provisions:
In accordance with the inheritance law of the people's republic of china, the illegitimate heirs who have taken possession of the deceased's land and home in accordance with the will are gifts and are subject to tax. With effect from 1 march 2019, the tax rate applicable to the anhui province was revised downwards to 3 per cent。
Tax collection
Housing gifts are approved by the requisitioning authority by reference to the market price for the sale of land use rights and the sale of houses. The value added tax is not included in the transaction price of the tax。
Non-tax provisions:
Legal heirs under the inheritance law of the people's republic of china (including spouses, children, parents, siblings, grandparents and grandparents) inherit land, property and property without tax。
Policy basis:
1. Recontribution by the general directorate of state taxes on issues relating to tax rights in relation to the inheritance of land and home ownership (state tax letter 2004) 1036)
2. Circular of the ministry of finance of the state tax administration on the basis of the tax on the increase in the number of enterprises, property tax, land value added tax, personal income tax number 43)
Taxation
Taxable provisions:
Inheritance shall be subject to a stamp duty on transfer of title at a rate of five per 10,000。
Tax collection
It is determined by the requisitioning authority by reference to the market price of the house。
Preferential policies:
Small-scale vat taxpayers are reduced by 50 per cent to resource tax, urban maintenance and construction tax, property tax, urban land use tax, stamp duty, cropland occupancy tax and education surcharge, and local education supplement。
Policy basis:
1. Provisional regulations of the people's republic of china on stamp duties (state council decree no. 11)
2. Circular of the department of finance of anhui province and the department of revenue of anhui province of the national revenue directorate on the 50 per cent reduction in local taxes and surcharges for small taxpayers in our province (fiscal tax law [2019) no. 119)
When the heir assigns the house to which he inherits, the income from which he transfers the house is deducted from the actual acquisition cost of the house acquired by the original heir and the balance of the related tax payments made by the heir during the succession and transfer, the income tax payable by the heir is paid at the rate of 20 per cent。
Policy basis:
Circular of the state tax administration on issues relating to the strengthening of non-reimbursable gifts by individuals in real estate transactions and the administration of real estate tax (state tax issuance 2006) no. 144)
02
Programme
Zhang gave a general residence to his grandson at a rate of $1 million, which is known to be 110 square metres, and the contract price is not less than the minimum tax rate approved by the collecting authority, assuming that no expenses other than household tax fees were incurred during the transfer
Taxation
Donors and grantees are close relatives, are exempt from personal income tax, are temporarily exempt from land value added tax and are exempt from vat and its surcharges. Zhang is required to pay tax dues and stamp duties and zhang is required to pay stamp duties。
Zhang has to pay taxes
Taxes = 1,000,000 x 3% = 30,000 yuan
Stamp duty (transfer of title) = 1,000,000 x 0. 05 per cent x 50 per cent = 250 yuan
Zhang has to pay taxes
Stamp duty (transfer of title) = 1,000,000 x 0. 05 per cent x 50 per cent = 250 yuan
Tax collection
Value tax
Taxable provisions:
An entity or an individual transfers intangible or immovable assets to another unit or to an individual free of charge, except for use in a public good or for the benefit of the public, as sale services, intangible or immovable property。
Vat will be paid in full at the rate of 5 per cent for the non-reimbursable transfer of housing for less than two years. The above policy applies to areas outside beijing, shanghai, guangzhou and shenzhen。
Value added tax supplement: 7 per cent (urban), 5 per cent (county towns), 1 per cent (towns), 3 per cent for education and 2 per cent for local education。
Tax collection
(c) all price and non-price costs earned. No price is approved in order by the collecting authority。
Tax exemption:
1. A person who buys housing for more than two years (including two years) without charge is exempt from vat。
2. Grant free of charge to a spouse, parents, children, grandparents, grandchildren, grandchildren, siblings; grant free of value added tax to a dependant or a dependant who has a direct or maintenance obligation towards him。
Preferential policies:
Small-scale vat taxpayers are reduced by 50 per cent to resource tax, urban maintenance and construction tax, property tax, urban land use tax, stamp duty, cropland occupancy tax and education surcharge, and local education supplement。
Policy basis:
1. Circular of the ministry of finance, state tax administration on the full roll-out of the vat pilot no. 36)
2. Interim measures for the administration of the transfer of real property value added tax by taxpayers (state tax administration bulletin no. 14 of 2016)
Land value tax
Tax exemption:
Transfer of intangible or immovable property by an entity or individual to another unit or person, without charge, as a sale service, intangible or immovable property, except for use in a public good or for the public good
Land value added tax is temporarily waived for the sale of housing by individuals。
Policy basis:
1. Circular of the ministry of finance, state tax administration on the full roll-out of the vat pilot no. 36)
2. Circular on the adjustment of tax policies on real estate transactions [2008] 137
Taxes received by individuals
Taxable provisions:
If the owner of the home grants the right to own the house free of charge to another person, the recipient of the gift from a non-reimbursable gift is subject to a personal income tax rate of 20 per cent calculated on the basis of the “fortuitous gain” item。
Tax collection
The value of the gift and the house, as indicated in the contract for the grant, is set off against the balance of the relevant taxes paid by the grantees during the grant。
If the value of the house is clearly lower than the market price or if the value of the gift is not indicated in the contract for real estate, the tax authorities may assess the price on the basis of the market for the gifted house or adopt other reasonable means to determine the amount of taxable income of the grantees。
Non-tax provisions:
No personal income tax shall be levied on the parties in respect of property rights granted free of charge in the following cases:
(i) the owner of the home grants property rights free of charge to the spouse, parents, children, grandparents, grandparents, grandchildren, grandchildren, siblings
(ii) the owner of the home grants the right to the property free of charge to the person to whom the maintenance or maintenance is owed
Policy basis:
1. Circular of the ministry of finance of the general directorate of state revenue on personal income tax issues related to non-remunerated properties granted to individuals (fiscal) [2009] no. 78)
2. Circular of the ministry of finance, the state revenue service on the strengthening of non-reimbursable gifts to individuals in real estate transactions and issues related to the administration of real estate tax (state tax issuance 2006) no. 144)
3. Circular of the ministry of finance, general directorate of taxes on individual access to income-related income taxable items (ministry of finance, general directorate of taxes, 2019, no. 74)
Taxes
Taxable provisions:
In the case of individual non-reimbursable gifts and real estate, the grantee shall be taxed in full. With effect from 1 march 2019, the tax rate applicable to the anhui province was revised downwards to 3 per cent。
Tax collection
Housing gifts are approved by the requisitioning authority by reference to the market price for the sale of land use rights and the sale of houses. The value added tax is not included in the transaction price of the tax。
Policy basis:
1. Circular of the department of revenue of the province of anhui on the adjustment of tax rates applicable to tax returns (customs law [2019)) 120)
2. Circular of the national tax administration on issues relating to the strengthening of non-reimbursable gifts to individuals in real estate transactions and the administration of real estate tax (state tax issuance 2006) no. 144)
Taxation
Taxable provisions:
The stamp duty is payable for the transfer of property in respect of housing gifts at a rate of five per 10,000。
In the case of the same documents, signed by two or more parties and signed by each of them, the full amount of each of them shall be paid。
Tax collection
The requisitioning authority approves the market price for the sale of the house。
Preferential policies:
Small-scale vat taxpayers are reduced by 50 per cent to resource tax, urban maintenance and construction tax, property tax, urban land use tax, stamp duty, cropland occupancy tax and education surcharge, and local education supplement。
Policy basis:
1. Provisional regulations of the people's republic of china on stamp duties (state council decree no. 11)
2. Circular of the department of finance of anhui province and the department of revenue of anhui province of the national revenue directorate on the 50 per cent reduction in local taxes and surcharges for small taxpayers in our province (fiscal tax law [2019) no. 119)
1. When a grantee transfers a gifted house, the original grantee's income from the transfer of the gift is set off against the actual purchase cost of the house and the balance of the related tax paid by the grantee in the course of the grant and transfer. Personal income tax is paid at the rate of 20 per cent of the tax due to the grantee. In the event that the grantee transfers a house for which there is a manifestly low and unjustified price, the tax authority may approve the transfer income on the basis of an assessment of the price of the house or other reasonable price。
2. Individual income tax on personal income from gifted immovable property may not be levied with authorization and must be levied strictly in accordance with the provisions of the tax law。
Policy basis:
Circular of the state tax administration on issues relating to the strengthening of non-reimbursable gifts by individuals in real estate transactions and the administration of real estate tax (state tax issuance 2006) no. 144)
03
Method of sale
Wang sells a common house located in hoi fat city “five only” to xiao li for 800,000 yuan, which is known to be 100 square metres, at a contract price not less than the minimum tax rate approved by the levying authority, assuming that there are no other properties in his family's name, and that no expenses other than household taxes have been incurred during the course of the transfer
Taxation
Because the house is full of five, he is exempt from income tax. Two years after purchase, vat and its surcharges are exempt. Individual sales of housing are temporarily exempt from land value added tax and stamp duty. Since the size of the dwelling is greater than 90 m2, li, as a contributor to the tax, has no housing in his name, and the flat is the first home, with a tax rate of 1. 5 per cent。
Taxes = 800,000 x 1. 5% = 12,000
Tax collection
Value tax
Taxable provisions:
Individuals who purchase housing for less than two years will pay vat in full at the rate of 5 per cent
Value added tax supplement: 7 per cent (urban), 5 per cent (county towns), 1 per cent (towns), 3 per cent for education and 2 per cent for local education。
Tax collection
(c) all price and non-price costs earned。
Tax exemption:
Individuals are exempt from vat for purchases of housing for foreign sales for more than two years (including two years). The above policy applies to areas outside beijing, shanghai, guangzhou and shenzhen。
Preferential policies:
Small-scale vat taxpayers are reduced by 50 per cent to resource tax, urban maintenance and construction tax, property tax, urban land use tax, stamp duty, cropland occupancy tax and education surcharge, and local education supplement。
Policy basis:
1. Circular of the ministry of finance, state tax administration on the full roll-out of the vat pilot no. 36)
2. Circular of the department of finance of anhui province and the department of revenue of anhui province of the national revenue directorate on the 50 per cent reduction in local taxes and surcharges for small taxpayers in our province (fiscal tax law [2019) no. 119)
Land value tax
Tax exemption:
Land value added tax is temporarily waived for the sale of housing by individuals。
Policy basis:
Circular on the adjustment of the tax policy on real estate transactions 137
Taxes received by individuals
Taxable provisions:
(non-approved modalities)
The income derived from the transfer of the house is deducted from the balance of the original value of the house and the taxes paid in the course of the transfer, together with the related reasonable expenses。
(approval)
If the taxpayer does not provide a complete and accurate certificate of the original value of the house and is unable to correctly calculate the original value of the house and the amount due, the tax authorities may impose an authorized tax on the taxpayer in accordance with article 35 of the law of the people's republic of china on the administration of tax collection, i. E. An approved amount of personal income tax payable in proportion to the income transferred from the taxpayer's housing. The specific proportion is determined by the provincial tax authorities or municipal tax authorities authorized by the provincial tax authorities within a range of 1 to 3 per cent of the transfer income, depending on the region, geographical location, time of construction, type of house, average price of housing, etc. In which the taxpayer sells the house。
Tax collection
Actual prices. In the case of a flat declared by a taxpayer whose transaction price is clearly lower than the market price, the tax authorities may assess the price on the basis of the housing market or take other reasonable measures to determine the amount of taxable income。
Tax exemption:
Persons are exempt from personal income tax for the transfer of income derived from their own use for more than five years and as the sole household dwelling。
Policy basis:
1. Circular of the ministry of finance, general directorate of state taxes, ministry of construction on issues relating to the taxation of personal income from the sale of housing by individuals (fiscal word [1999]) no. 278)
2. Circular of the general state tax administration on matters relating to the collection of personal income tax on the transfer of personal housing (state tax) [2006] no. 108)
Taxes
Taxable provisions:
With effect from 1 march 2019, the tax rate applicable to the anhui province was revised downwards to 3 per cent。
Tax abatement provisions:
(i) taxes of the amount of 90 square metres and less, reduced by 1 per cent, on the purchase by individuals of the sole home of the family (family members, including the purchaser, spouse and minor children), and on the amount of the sum of 1. 5 per cent。
(ii) taxes reduced by 1 per cent for the purchase by individuals of a second set of improved housing units of 90 square metres or less; taxed by 2 per cent for more than 90 square metres。
Tax collection
Contract price -- value added tax due
Policy basis:
Circular of the ministry of finance, the state tax administration, the ministry of housing, urban and rural construction on the adjustment of the tax on the chain of real estate transactions and the tax incentives (fiscal (2016) no. 23)
Taxation
Tax exemption:
The stamp duty is temporarily waived for the sale or purchase of housing by individuals。
Policy basis:
Circular of the ministry of finance of the general directorate of state taxes on the adjustment of the tax policy on real estate transactions no. 137)
Taxpayers who sell their own houses and repurchase them within one year are no longer exempt from personal income tax。
2. The tax authorities have the power to approve the tax liability of taxpayers who are manifestly understated and unjustified。
Policy basis:
1. Circular of the ministry of finance, general directorate of state taxes, ministry of housing and urban and rural construction on the adjustment of the chain tax on real estate transactions, personal income tax preferences (fiscal (2010)) no. 94)
Law of the people's republic of china on the administration of tax collections
