Guide to Property Taxes in China
| Effective Tax Rate on Rental Income | |||
| Monthly Income | US$1,500 | US$6,000 | US$12,000 |
| Tax Rate | 20% | 20% | 20% |
Nonresident individuals are generally subject to Chinese Individual Income Tax (IIT) only on income derived from Chinese sources. Rental income and gains from the disposal of real property located in China are generally considered Chinese-source income. Individuals are taxed separately for IIT purposes, and China does not provide for joint taxation of married couples.
Rental Income Tax
A nonresident individual earning rental income from property in China is generally subject to IIT at 20% of taxable rental income, although qualifying residential property rented by an individual generally benefits from a reduced 10% rate. The tax is imposed on taxable rental income after permitted deductions rather than directly on gross rent. Rental income may also be subject to VAT; from 2026, individuals renting residential housing generally calculate VAT under the simplified method at an effective rate of 1.5%. Property Tax is generally imposed at 12% of VAT-exclusive rental income, with a preferential 4% rate generally applying to residential property rented by individuals. Additional local taxes, surcharges, exemptions, and preferential reductions may apply, so the effective tax burden can vary depending on the property and location.
Capital Gains Tax
Gains from property transfers are taxed at a flat rate of 20%. Business Tax has been replaced by VAT; from 1 January 2026, an individual selling a home held for at least 2 years is exempt from VAT, while a home held for less than 2 years is generally subject to VAT at 3% of the full sales amount. China's general LAT system does have progressive rates of 30%–60%, individuals selling residential housing are currently temporarily exempt from LAT:
| Land Appreciation Tax Rates | Tax Rate |
| Up to 50% of deductions | 30% |
| 50% - 100% of deductions | 40% |
| 100% - 200% of deductions | 50% |
| Over 200% of deductions | 60% |
Corporate Taxation
A Chinese resident company is generally subject to Enterprise Income Tax (EIT) at a standard rate of 25% on its taxable profits, including profits derived from rental income and gains from the disposal of property. Taxable income is calculated after allowable costs, expenses and other deductions. Rental and property transactions may also be subject to Value-Added Tax (VAT), with the applicable treatment depending on the nature of the property and transaction.
Corporate transfers of real estate are generally also subject to Land Appreciation Tax (LAT), calculated on the appreciation amount after permitted deductions. LAT is imposed at progressive rates ranging from 30% to 60%, depending on the amount of appreciation relative to the allowable deductions.
Property Buying and Selling Costs/Taxes
| Transaction Costs | Rate | Who Pays |
| Property Transfer Tax (Deed Tax) | 1.00% - 3.00% | Buyer |
| Notary Fees (Stamp Tax) | 0.10% | Buyer |
| Legal Fees | 3.00% - 4.00% | Buyer |
| Real Estate Agent Fee | 2.00% 1.00% |
Buyer Seller |
| Costs Paid by buyer | 6.10% - 9.10% | |
| Costs Paid by seller | 1.00% | |
| Total Roundtrip Cost | 7.10% - 10.10% |
Property Holding Tax
Property Tax is generally imposed on urban real estate at 1.2% of the property's residual value, calculated after deducting 10% to 30% from its original value, with the applicable deduction determined locally. However, individually owned property that is not used for business purposes is generally exempt. Where an individual rents out property, Property Tax is generally levied at 12% of VAT-exclusive rental income, with a preferential rate of 4% applying to residential housing rented by individuals. Property Tax is assessed annually and generally paid in installments, with payment schedules determined locally.
