OVERVIEW OF CHINA'S CURRENT TAX SYSTEM
Urban Real Estate Tax
(1) Taxpayers
At present, this tax is only applied to enterprises with foreign
investment, foreign enterprises and foreigners, and levied on
house property only.
Taxpayers are owners, mortgagees custodians and/or users of
house property.
(2) Tax base, tax rates and computation of tax payable
Two different rates are applied to two different bases: one
rate of 1. 2% is applied to the value of house property, and
the other rate of 18% is applied to the rental income from the
property. The formula for calculating House Property Tax payable
is:
Tax payable = Tax base ×Applicable rate
(3) Major exemptions and reductions
Newly constructed buildings shall be exempt from the tax for
three years commencing from the month in which the construction
is completed. Renovated buildings for which the renovation expenses
exceed one half of the expenses of the new construction of such
buildings shall be exempt from the tax for two years commencing
from the month in which the renovation is completed. Other house
property may be granted tax exemption or reduction for special
reasons by the People's Government at provincial level or above.
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