China will reduce the VAT rate on individual housing sales purchased less than two years ago from 5% to 3%, effective 1 January 2026, while clarifying that sales of housing held for two years or more remain VAT-exempt.
China’s fiscal and tax authorities (STA) announced on 6 January 2025 that it will lower the value-added tax (VAT) rate from 5% to 3% for individuals selling housing purchased less than two years ago, effective 1 January 2026.
The new policy, jointly released by the Ministry of Finance and the State Taxation Administration, further clarifies that sales of housing purchased two years or more ago are exempt from VAT.
For VAT on individual housing sales not declared or paid before 1 January 2026, the announcement noted that the new provisions apply if the requirements are met.
