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FACTBOX-Chinese policies to help revive property market

Published 04/30/2009, 05:47 AM
Updated 04/30/2009, 05:56 AM

BEIJING, April 30 (Reuters) - China's State Council announced a cut in the minimum amount of capital required to start new investment projects in certain industries, including the residential property sector.

Wednesday's statement did not give details. The current minimum capital requirement for developers is 35 percent.

Following are some of the measures China has taken to revive the property market, a crucial driver of the national economy:

MARCH 6, 2009 -- China increases the housing component of its 4 trillion yuan ($586 billion) economic stimulus package to 400 billion yuan from 280 billion.

DEC 17, 2008 -- The State Council cuts to two years from five years the lock-up period beyond which people can resell property without paying business tax.

It also scraps urban property tax for foreign firms and individuals and lets people buy second homes on the same preferential terms normally reserved for buyers of first homes, subject to certain size restrictions.

OCT 22 -- The deed tax payable by first-time buyers of homes smaller than 90 sq m is cut to 1 percent. Stamp tax is scrapped for buyers and sellers, and the latter no longer have to pay VAT.

As part of the package of policies, the central bank cuts the minimum mortgage rate to 70 percent of its benchmark lending rates and reduces minimum down payments for owner-occupiers to 20 percent. Mortgage rates on housing provident fund loans fall by 27 basis points.

SEPT 1 -- For regions hit by natural disasters earlier in 2008, the central bank cuts the minimum mortgage rate to 60 percent of its benchmark lending rates. Down payments fall to 10 percent.

MAY-OCT -- More than a dozen cities, including Shanghai, Nanjing and Hangzhou, announce various measures such as cash subsidies and tax cuts to encourage home purchases. (Compiled by Langi Chiang; Editing by Alan Wheatley)

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