Hong Kong Stock Concept Tracking | Shanghai Introduces Various Real Estate Policies, Institutions Optimistic about Continued Improvement in Real Estate Market Sentiment (Including Concept Stocks)

Shanghai announces various real estate policies: With the approval of the municipal government, the Municipal Housing and Urban-Rural Development Commission, Municipal Housing Management Bureau, Municipal Finance Bureau, Municipal Tax Bureau and other departments jointly issued the "Notice on the Cancellation of Matters Related to the Standards for Ordinary Residential Housing". The notice specifies that individuals who sell residential housing that has been owned for more than 2 years will be exempt from value-added tax. Individuals who sell residential housing owned for less than 2 years will be required to pay the full amount of value-added tax at a rate of 5%. With the approval of the municipal government, the Municipal Housing and Urban-Rural Development Commission, Municipal Housing Management Bureau, Municipal Finance Bureau, Municipal Tax Bureau and other departments jointly issued the "Notice on the Cancellation of Matters Related to the Standards for Ordinary Residential Housing". The notice specifies that individuals purchasing a single-family residential housing unit with an area of 140 square meters or less will be subject to a reduced deed tax rate of 1%; for units with an area over 140 square meters, the reduced rate will be 1.5%. Individuals purchasing a second residential housing unit with an area of 140 square meters or less will be subject to a reduced deed tax rate of 1%; for units with an area over 140 square meters, the reduced rate will be 2%. With the approval of the municipal government, the Municipal Housing and Urban-Rural Development Commission, Municipal Housing Management Bureau, Municipal Finance Bureau, Municipal Tax Bureau and other departments jointly issued the "Notice on the Cancellation of Matters Related to the Standards for Ordinary Residential Housing". The notice specifies that individuals who transfer residential housing without providing complete and accurate proof of the original value of the property will be subject to a personal income tax assessment. The tax will be calculated at a rate of 1% based on the transfer income. Therefore, the city has canceled the previous provision that required a 2% personal income tax on the transfer income of non-ordinary residential housing. Other policies regarding personal income tax have not been adjusted. For example, individuals who sell their self-used property after owning it for more than 5 years and it is their only living property will be exempt from personal income tax. The tax policy for residents who purchase new housing remains in accordance with relevant national regulations. China Securities Co., Ltd. released a research report stating that the adjustment to the land value-added tax is the first time that the burden of taxes has been reduced for real estate companies, effectively alleviating the pressure on cash flow for these companies. By lowering the deed tax and value-added tax for housing transactions, the transaction costs have been effectively reduced, stimulating demand for improved housing and boosting the real estate market, especially in first-tier cities. Since the political meeting on September 26 called for stabilizing the real estate market by relaxing purchase restrictions in first-tier cities, increasing the inventory of commercial housing, storing unused land acquired for special bonds, implementing the monetization of dilapidated housing reconstruction, and adjusting tax policies, a series of policies have been continuously introduced to boost the prosperity of the property market, highlighting the positive outlook for the real estate sector. Real estate related companies in the industry chain: CHINA OVERSEAS (00688), C&D INTL GROUP (01908), YUEXIU PROPERTY (00123), GREENTOWN CHINA (03900), SUNAC (01918), LONGFOR GROUP (00960), SINO-OCEAN GP (03377), CHINA VANKE (02202), CHINA RES LAND (01109), XUHUI HOLDINGS (00884), etc; Property management companies: CHINA RES MIXC (01209), POLY PPT SER (06049), CHINA OVS PPT (02669), MIDEA REAL EST (03990), etc. Real estate agencies: BEKE-W (02423), CG SERVICES (06098).