China: Living There - Tax Issues
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Living There
Rental Income Tax
The Ministry of Finance reduced the taxes on rental income from 01 January 2001. Rental income earned by residents is currently taxed at 10%. Residents are entitled to a standard deduction of 20% of the gross income to cover income-generating expenses. Effectively, the rental income tax is 8% of the gross income (10% tax on 80% of the gross rent).
House Property Tax
House property tax is levied on all real property (but not land) owned by residents at a rate of 1.2% of its assessed value or at 18% of its annual rental income. Residents are entitled to a deduction of 10% to 30% of the property’s assessed or annual rental value. The exact allowable deduction depends on the local authorities . Consequently, the tax base is 70% to 90% of either the property’s assessed value or annual rental value.
Land Use Tax
Land use tax is levied on all individuals who use land in cities and county towns. For properties located in urban areas, the tax rates vary from CNY0.5 (US$0.06) to CNY10 (US$1.25) per square meter (sq. m.). For properties located in county towns, the tax rates vary from CNY0.3 (US$0.38) to CNY6 (US$0.75) per sq. m.
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