This policy adjustment, on the one hand, raised the 1% tax rate area standard from 90 square meters to 140 square meters, and on the other hand, reduced the tax rate for two apartments, and at the same time reduced the purchase cost of housing that is just needed and improved. The demand side is expected to improve.
The Zhitong Finance App learned that Guolian Securities released a research report saying that concessions on deeds tax and value-added tax have a positive effect on increasing transaction activity in the property market and promote the stabilization of the real estate market; land value-added tax adjustments can ease the cash pressure on housing enterprises, and at the same time help increase the profit margin level of housing enterprises. It is recommended to focus on the layout of first-tier and core second-tier cities, housing enterprises that focus on improving products, and real estate brokerage platforms that benefit from the continuous implementation of favorable policies, increased activity in the second-hand housing market, and have core competitiveness.
Industry events: On November 13, the Ministry of Finance, the State Administration of Taxation, and the Ministry of Housing, Urban-Rural Development issued a notice on tax policies to promote the stable and healthy development of the real estate market, covering aspects such as deeds tax, value-added tax, and land tax increases.
The main views of Guolian Securities are as follows:
The deeds tax rate was lowered, and the cost of buying a home was further reduced
Three departments, including the Ministry of Finance, issued a new deeds tax policy: for the sole house purchased by a family with an area of 140 square meters or less, the deeds tax rate is 1%, and for those with an area of 140 square meters or more, the deeds tax rate is 1.5%. For a second home purchased by a family, the deeds tax rate is 1% for those with an area of 140 square meters or less, and 2% for those with an area of 140 square meters or more. This policy adjustment, on the one hand, raised the 1% tax rate area standard from 90 square meters to 140 square meters, and on the other hand, reduced the tax rate for two apartments, and at the same time reduced the purchase cost of housing that is just needed and improved. The demand side is expected to improve.
Unify the value-added tax on housing, and demand for improvement is expected to be released
According to the announcement, after first-tier cities abolish the standard for ordinary housing and non-ordinary housing, they will apply a uniform value-added tax policy for second-hand housing with the rest of the country: individuals can be exempted from VAT after 2 years of selling and holding a home. At the end of September, Shanghai and Shenzhen adjusted the value-added tax exemption period for personal housing, from 5 years to 2 years. This policy further reduces the value-added tax associated with abolishing general housing standards. The bank expects activity in the second-hand housing market to increase, and demand for improvement is expected to be released.
Lower the lower limit of the estimated tax increase rate for land tax increases and ease cash pressure
Taxpayers who build an ordinary standard house and sell it, continue to be exempt from land value-added tax if the added value does not exceed 20% of the deducted project amount. In cities where standards for ordinary housing and non-ordinary housing have been abolished, the scope of exemption projects has been expanded, which can improve the profit margin level of housing enterprises, especially housing enterprises that previously accounted for a high proportion of non-general housing projects. The lower limit of the pre-levy rate of land value-added tax was reduced by 0.5 percentage points. After the adjustment, with the exception of affordable housing, the lower forecast rate for the eastern provinces is 1.5%, the lower forecast rate for the central and northeastern provinces is 1%, and the lower forecast rate for the western provinces is 0.5%. The reduction in the forecast rate can reduce the cash expenses of housing enterprises in the early stages of the project and ease the current liquidity pressure.
Investment advice
It is recommended to focus on real estate enterprises focusing on first-tier and core second-tier cities, focusing on improved products, and having the ability to acquire land continuously, such as Greentown China (03900), C&D International Group (01908), and Binjiang Group (002244.SZ);
Focus on real estate brokerage platforms that have benefited from the continuous implementation of favorable policies, increased activity in the second-hand housing market, and have core competitiveness, such as I Love My Family (000560.SZ).
Risk warning: Policy effects fall short of expectations; liquidity risks of housing enterprises have increased; market confidence falls short of expectations.
