Mon, October 26, 2009
Business > Industries

Extension of home sales policy uncertain

2009-10-26 01:37:30 GMT2009-10-26 09:37:30 (Beijing Time)  Global Times

Visitors look at model residential apartment buildings of a property project during a real estate fair in East China's Zhejiang Province on Sunday. Home sales have been on the rise in Beijing in October. Photo: CFP

By Zhao Qian

Analysts are unsure about the future of a preferential policy designed to boost second-hand home sales across the country. The policy is set to expire at the end of the year.

Under the current preferential policy, home-owners who sell housing units that they have held for more than two years are exempted from a turnover tax, according to a circular jointly issued by the Ministry of Finance and the State Administration of Taxation at the end of last year.

The preferential policy, which began January 1, is set last until December 31, 2009, according to the circular.

The buyers end up paying the turnover tax, so the home-owners benefit more from the policy, Duan Wei, advisor of Homelink Real Estate Agent (Beijing) told the Global Times on Sunday.

"Nearly 30 to 40 percent of the people who bought homes in Century City (a residential zone) in October in Beijing were afraid of the expiration of the policy," Duan said.

"And the sales volume at Century City in October has been bigger than in September," he added.

But analysts remain divided on whether the policy should be continued.

"We hope the preferential policy will be continued," Hu Jinghui, deputy manager of housing agency 5I5J, was quoted by real estate information website www.focus.cn as saying.

The enormous increase in second-hand home sales is directly related to the policy, he explained.

But Qian Tiegang, a professor at Shandong University was quoted by a website for the city of Jinan, e23.cn, as saying that the second-hand homes sales volume in Shandong's capital has more to do with rising demand than the preferential policy.

"Local governments may suggest to the central authorities for extending the preferential policies," Li Zhanjun, director of E-house China R&D Institute told the Global Times on Sunday.

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