Beijing will scrap home purchase incentives following the surge in property prices, reducing the range of sales-tax exemption on the housing market and implementing the 40 percent down payment requirement for a second home.
In a statement, the Beijing Municipal Commission of Housing and Urban-Rural Development said that houses being sold after five years of ownership will be exempted from tax, compared with only two years of ownership in the previous years.
This move aims to curb investment and speculative purchases, as well as balancing the supply and demand, the statement said.
Property prices in China increased 9.5 percent in January, the highest level in 21 months, as the number of new loans surged to 1.39 trillion yuan or $286.8 billion Singapore dollars.
Last month, the China Banking Regulatory Commission told several banks in the country to “strictly” follow its property lending policies.
Beijing will also tighten its rules on home purchases by foreigners, which temporarily loosened after the financial crisis. According to the statement, non-Chinese residents for less than a year cannot purchase property, and qualified buyers can only purchase one home.
It will also implement administrative measures to help developers speed up construction and sales.