New tax policies provide exemptions on land use tax, stamp duty, deed tax, property tax, and VAT for public rental housing construction and operation, while offering tax deductions for housing donations and relief for eligible rental subsidy recipients. The measures apply to approved public rental housing projects and remain effective through 31 December 2027.
China’s State Tax Administration issued Announcement No. 4 of 2026 on 12 January 2026, which revised tax incentives for public rental housing to strengthen the rental market.
The measures provide exemptions from various taxes, including urban land use tax, deed tax, stamp duty, land appreciation tax, property tax, and value-added tax, as well as income tax deductions for property donations and tax-free rental subsidies.
The measures are as follows:
- Urban land use tax is exempt for land used during the construction and occupation of public rental housing. Where public rental housing is developed as part of other housing projects, the exemption applies in proportion to the public rental housing building area to the total building area.
- Stamp duty on the construction and management of public rental housing is exempt for public rental housing management units. For mixed projects, the exemption applies in proportion to the floor area of public rental housing to the total floor area.
- Deed tax and stamp duty are exempt for public rental housing management units purchasing housing for use as public rental housing; stamp duty is also exempt for both parties to public rental housing lease agreements.
- Land value-added tax is exempt for enterprises, public institutions, social organisations, and other organisations transferring old houses as public rental housing sources, provided the value-added amount does not exceed 20% of deductible items.
- Charitable donations of housing for public rental housing by enterprises and other organisations may be deducted when calculating taxable income, within 12% of the annual total profit, with excess amounts carried forward for up to three years. Individuals may deduct qualifying donations within 30% of their declared taxable income.
- Housing rental subsidies received by eligible urban housing security families from local governments are exempt from personal income tax.
- Property tax and value-added tax are exempt for public rental housing and its rental income, provided that rental income is separately accounted for; failure to do so disqualifies the entity from the exemptions.
- Scope of public rental housing refers to housing included in government-approved public rental housing development and annual plans or approved for construction or collection, and managed in accordance with relevant national and local regulations.
- Compliance requirements require taxpayers to file tax exemption declarations and retain ownership certificates and relevant supporting documents for future reference.
These tax incentive policies are valid until 31 December 2027.
