Land appreciation tax is levied on units and individuals on incomes derived from the transfer of state-owned land-use rights, buildings and their attached facilities, and are assessed at a prescribed tax rate on the basis of the appreciation amount derived by the Taxpayer from the transfer of real estate.
(a) Taxpayer
Taxpayers of land appreciation tax are units and individuals who transfer state-owned land-use rights, buildings and their attached facilities and derive income from such transactions.
(b) Tax Rates and Deductible Items
- Appreciation amount
The appreciation amount is the balance of proceeds received by the taxpayer on the transfer of real estate, after deducting the sum of deductible items.
- Deductible items
Deductible items for the transfer of state-owned land-use rights include amounts paid for the acquisition of land-use rights, costs and expenses for the development of land, taxes and fees related to the transfer of real estate, and other deductible items as stipulated by the Ministry of Finance.
Deductible items for the transfer of new properties and buildings include amounts paid for the acquisition of land-use rights, costs and expenses for the construction of new buildings, taxes and fees related to the transfer of real estate, and other deductible items as stipulated by the Ministry of Finance.
Deductible items for the transfer of used properties and buildings include the assessed value of the properties and buildings, the land price paid for the acquisition of land-use rights, expenses as stipulated by the state, taxes and fees payable during the transfer stage, and other deductible items as stipulated by the Ministry of Finance.
- Tax rates
Land appreciation tax is levied at progressive rates at four levels:
Appreciation amount
Tax Rates
Not exceeding 50% of the sum of deductible items 30%
Exceeding 50% but below 100% of the sum of deductible items 40%
Exceeding 100% but below 200% of the sum of deductible items 50%
Exceeding 200% of the sum of deductible items 60%
(c) Filing of Tax Returns
Taxpayers should file their tax returns together with the necessary documents to the tax authorities at the place where the real estate is located within seven days of the signing of the real estate transfer agreement. The necessary documents include the real estate title deed and land-use right certificate, land transfer or real estate sale and purchase agreement, real estate evaluation report and other relevant documents.