1. Discussion: Taxes Related to House Property
Mr. Wang purchased an apartment of 100 m2 at the price of 8000 /m2 in May, 2014 and sold the apartment at the price of /m2 in August,2015. During Jan.,2015 to August,2015, He rent out the apartment and get RMB4000 per month as rents. He kept the invoice while buying the house.
Question: what are the taxes payable for the purchase, holding and sale of the apartment?
12:03:46
Dr.DU Li,Depertment of Pulbic Economics,Fudan University

2. Dr.DU Li,Depertment of Pulbic Economics,Fudan University
Discussion: Taxes Related to House Property
Mr. Wang purchased an apartment of 100 m2 at the price of 8000 /m2 in May, 2014 and sold the apartment at the price of /m2 in August,2015. During Jan.,2015 to August,2015, He rent out the apartment and get RMB4000 per month as rents.
Deed Tax
Sole home
Ordinary
<90 M2 1%
>=90 M2
1.5%
Non-ordinary 3%
Second and other
(For non-residential house property, the Deed Tax rate is 3% and Stamp tax rate is 0.05%.)
12:03:46
Dr.DU Li,Depertment of Pulbic Economics,Fudan University

3. Discussion: Taxes Related to House Property
Mr. Wang purchased an apartment of 100 m2 at the price of 8000 /m2 in May, 2014 and sold the apartment at the price of /m2 in August,2015. During Jan.,2015 to August,2015, He rent out the apartment and get RMB4000 per month as rents.
Business Tax
Residential
>=2 years
Ordinary
Non-ordinary
(selling price-buying price) ×5%
<2 years
selling price×5%
Non-residential
(selling price-buying price)×5%
12:03:46
Dr.DU Li,Depertment of Pulbic Economics,Fudan University

4. Discussion: Taxes Related to House Property
Mr. Wang purchased an apartment of 100 m2 at the price of 8000 /m2 in May, 2014 and sold the apartment at the price of /m2 in August,2015. During Jan.,2015 to August,2015, He rent out the apartment and get RMB4000 per month as rents.
Individual Income Tax
Residential
<=5 years or second home
Without buying invoice
Ordinary
Selling price×1%
Non-ordinary
Selling price×2%
With buying invoice
(Selling price-buying price-taxes-expenses) ×20%
>= 5 years and sole home
Non-residential
12:03:47
Dr.DU Li,Depertment of Pulbic Economics,Fudan University

5. Discussion: Taxes Related to House Property
Mr. Wang purchased an apartment of 100 m2 at the price of 8000 /m2 in May, 2014 and sold the apartment at the price of /m2 in August,2015. During Jan.,2015 to August,2015, He rent out the apartment and get RMB4000 per month as rents.
Ordinary house
Style
New-style Apartments of 5 stories and above
Old-style apartments of less than 5 stories
Price
Within Inner ring
<=RMB4.5 million
Inner ring to outer ring
<=RMB3.1 million
Outside outer ring
<=RMB2.3 million
Construction Area
<=140 M2
12:03:47
Dr.DU Li,Depertment of Pulbic Economics,Fudan University

6. Dr.DU Li,Depertment of Pulbic Economics,Fudan University
Discussion: Taxes Related to House Property
Mr. Wang purchased an apartment of 100 m2 at the price of 8000 /m2 in May, 2014 and sold the apartment at the price of /m2 in August,2015. During Jan.,2015 to August,2015, He rent out the apartment and get RMB4000 per month as rents.
What taxes to consider?
The local Deed Tax rate is 3%.
The Business Tax rate for renting out houses by individuals is 1.5%，and for transfer of property is 5%.
The local City Maintenance and Construction Tax rate is 7%. The Education Surcharge rate is 3%.
The Stamp Tax rate for house purchase and sale contracts is 0.05%, but the tax is temporarily exempt for individuals buying and selling residential houses.
Land Appreciation Tax and Urban and Township Land Use Tax are temporarily exempt for individuals selling residential houses.
House Property Tax rate for renting out houses by individuals is 4%.
Individual income tax rate for rents is 10%, for income from transfer of house is 20%.
12:03:47
Dr.DU Li,Depertment of Pulbic Economics,Fudan University

7. Dr.DU Li,Depertment of Pulbic Economics,Fudan University
Discussion: Taxes Related to House Property
Mr. Wang purchased an apartment of 100 m2 at the price of 8000 /m2 in May, 2014 and sold the apartment at the price of /m2 in August,2015. During Jan.,2015 to August,2015, He rent out the apartment and get RMB4000 per month as rents.
Taxes at the time of purchasing the house :
Deed Tax： 800，000×3%=24，000
Taxes for the rents per month:
Business Tax：4000 ×1.5%=60
City Maintenance and Construction Tax: 60×7%=4.2
Education Surcharge:60×3%=1.8
House Property Tax:4000×4%=160
Individual Income Tax: (4000–800–60–4.2–1.8–160) × 10%=297.4
12:03:47
Dr.DU Li,Depertment of Pulbic Economics,Fudan University

8. Discussion: Taxes Related to House Property
Mr. Wang purchased an apartment of 100 m2 at the price of 8000 /m2 in May, 2014 and sold the apartment at the price of /m2 in August,2015. During Jan.,2015 to August,2015, He rent out the apartment and get RMB4000 per month as rents.
Taxes at the time of selling the house :
Business Tax: 1,200,000 ×5%=60,000
City Maintenance and Construction Tax: 60,000×7%=4,200
Education Surcharge: 60,000 ×3%=1,800
Individual Income Tax: (1,200,000–800,000–60,000–4200–1,800–24,000) ×20%=62,000
The individual has held the house for 2 years, so the Business Tax is levied on the full value at the rate of 5%.
Deed tax in purchasing the house
12:03:47
Dr.DU Li,Depertment of Pulbic Economics,Fudan University