China has announced an extension of its policy scrapping value-added tax (VAT) on certain residential property sales, as a form of VAT Exemption. It is the government’s intensified effort to stabilise the country’s struggling real estate sector.
The VAT exemption applies to specific categories of home sales in China. Initially, it introduces a temporary relief measure. Basically, this is expected to boost demand and ease financial pressure on developers and homebuyers.
By extending the policy, authorities hope to stimulate transactions in the housing market.
Now, this will restore buyer confidence, and slow the prolonged downturn that has weighed heavily on China’s economy.
The property sector is once a key driver of economic growth in China. Also, has faced persistent challenges in recent years, including weak demand, falling home prices and rising developer debt. The other is unfinished housing projects.
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Analysts say the extended VAT relief could help reduce transaction costs for buyers and encourage homeowners to sell.
Most importantly, this is particularly in major cities where market activity has remained subdued.
The move is part of a broader package of measures by Beijing aimed at supporting the real estate market, alongside easing mortgage rules, lowering down payment requirements, and encouraging banks to increase lending to qualified developers.