HK Stock Market Move | Interior housing stocks generally opened higher, and multiple tax incentives for housing transactions have been introduced to help stabilize the real estate market and prevent further decline.

The real estate stocks opened high, as of press time, R&F PROPERTIES (02777) rose by 10% to HK$1.98; SUNAC (01918) rose by 5.63% to HK$3; SHIMAO GROUP (00813) rose by 5.38% to HK$1.37; MIDEA REAL EST (03990) rose by 3.77% to HK$3.3. On the news front, on November 13, the Ministry of Finance and two other departments issued the "Announcement on Tax Policies to Promote Stable and Healthy Development of the Real Estate Market", specifying multiple tax preferential policies to support the development of the real estate market. In terms of deed tax, the current area standard enjoying a 1% low tax rate preference will be raised from 90 square meters to 140 square meters, and it is clearly stated that Beijing, Shanghai, Guangzhou, and Shenzhen can apply the deed tax preferential policy for the second home of a family in the same way as other areas; in terms of land value-added tax, the lower limit of the pre-tax rate of land value-added tax in various regions will be uniformly reduced by 0.5 percentage points; in terms of value-added tax, value-added tax will be exempted for individuals who sell purchased housing that has been owned for more than 2 years. Soochow believes that the reduction of real estate transaction taxes and fees is beneficial for reducing friction costs in the housing purchase process. After the policy is introduced, the deed tax rate for families buying a second home will be significantly reduced, and non-ordinary residential transactions will not have to pay value-added tax after 2 years of ownership. The main beneficiaries of the policy are the replacement and improvement customer groups, aiming to guide the reasonable release of improvement demand. The unified downward adjustment of the pre-tax rate of land value-added tax in various regions by 0.5 percentage points is expected to alleviate the cash flow pressure of real estate companies to a certain extent. The introduction of this policy is conducive to unblocking the home-buying chain and restoring market transaction volume. The increase in transaction volume is beneficial for boosting market confidence and stabilizing transaction prices, thereby promoting the stabilization of the real estate market.