China will reduce the value-added tax (VAT) rate on residential property sales held for less than two years from 5 percent to 3 percent, starting Jan. 1, 2026, fiscal and

tax authorities announced on Tuesday.

The policy, jointly issued by the Ministry of Finance and the State Taxation Administration, also reaffirms that individuals selling homes purchased two years ago or longer will remain exempt from VAT.

According to the announcement, the new tax provisions may also apply to eligible housing transactions for which VAT has not yet been declared or paid before Jan. 1, 2026. Photo by N509FZ, Wikimedia commons.