February 25, 2010
Beijing scraps some home purchase incentives
(BEIJING) Beijing will scrap some home purchase incentives after property prices surged, reducing the scope of the housing sales-tax exemption and enforcing the 40 per cent down payment requirement for second homes.
Homes sold after being owned for five years will be exempt from the tax, compared with two years previously, the Beijing Municipal Commission of Housing and Urban-Rural Development said in a statement posted on its Web site late on Tuesday.
The measures are aimed at curbing investment and speculative purchases and at balancing supply and demand, according to the statement.
China's property prices surged 9.5 per cent in January, the most in 21 months, as total new loans surged to 1.39 trillion yuan (S$286.8 billion), more than in the previous quarter combined.
The China Banking Regulatory Commission told banks last month to 'strictly' follow property lending policies.
Beijing will also tighten rules on home purchases by foreigners, temporarily relaxed after the financial crisis. Non-Chinese resident for less than a year can't buy properties and qualified purchasers are limited to one home, the statement said.
The local government will also adopt administrative measures to help developers speed up construction and sales, the government agency said.
Martin Koh/ Sherry Tang