Deed Tax

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25 Deed Tax







This tax is levied on transferees of property titles at the time of the transfers. The Provisional Regulations of the People's Republic of China on Deed Tax currently in force were promulgated by the State Council on July 7, 1997, and came into effect on October 1, 1997.

Deed Tax is collected and administered by the local financial departments and the local tax departments. The revenue collected belongs to the local governments. In 2003, revenue from Deed Tax amounted to 35.94 billion yuan, accounting for about 1.8% of China's total tax revenue.


General Guidelines

Entities Subject to Tax

Any of the following entities that transfers land/house property titles within China may be subject to tax:

  • State-owned enterprises (SOEs), collectively owned enterprises, private enterprises, joint-equity enterprises, enterprises with foreign investment, foreign enterprises, and other enterprises.
  • Administrative units, institutions, military units, social organizations, and other units.
  • Individual business operators and other individuals.


Tax Scope

What Constitutes a Taxable Transferee

Entities that receive land/house property titles through any of the following ways constitute taxable transferees:

  • Transfers.
  • Purchases.
  • Gifting.
  • Exchanges.

What Constitutes a Taxable Transfer

Major Categories

The following activities or transactions constitute taxable transfers of land/house property titles:

  • Sales of State-owned land-use rights.
  • Transfers of other land-use rights (including sales, gifting and exchanges; but excluding transfers of collective land contracting business operation right in the countryside).
  • Purchases and sales of houses.
  • Gifting of houses.
  • Exchanges of houses.
Other Categories

The following activities or transactions involving land/house property titles are deemed to be transfers of use rights, purchases, or sales of houses, or the gifting of houses, and are taxed accordingly:

  • Using such titles as investments or participation.
  • Using such titles to pay debts.
  • Receiving such titles in the form of awards.
  • Receiving such titles in the form of pre-purchases or prepayments related to funding pools for house construction.

Special Instances


Where the following exchanges involve unequal exchange prices, the party that pays more in cash, in kind, in intangible assets, or in the form of some other economic interests, shall pay tax:

  • Exchanges of land-use rights.
  • Exchanges of houses.
  • Exchanges of land-use rights and houses.

    Where the prices are equal, no tax shall be payable by any of the parties.

Tax Base

The tax base varies depending on the nature of the transaction. For tax purposes, the transactions shall be grouped into three main categories.

  • Sales of State-owned land-use rights, sales of other land-use rights, and purchases/sales of houses.
  • Gifting of land-use rights and gifting of houses.
  • Exchanges of land-use rights and exchanges of houses.

Sales of Land-Use Rights, House Purchases/Sales

In general, the tax base for this category shall be the concluded price, namely, the price agreed upon in the title-transfer contracts.

It includes all payments made by the transferee, whether in cash, in kind, in intangible assets, or in the form of some other economic interests.

Transfers of State Land-Use Rights

In general, for transfers of State land-use rights, the tax base shall comprise the total economic interests paid by the transferees to obtain the rights.

  • Transfers through agreements: The tax base shall be the concluded price.

    It includes land transfer charges; land compensation; settlement allowances; compensation for any fixtures added to the land and the young plants; and removal compensation.

    It also includes expenditure on related city infrastructure construction that the transferees may pay in cash, in kind, in intangible assets, or in the form of some other economic interests.

  • Transfers through auctions: The tax base shall be the price transacted at the auction.

    It includes land transfer charges, expenditure on the construction of related city infrastructure, and various forms of compensation.

  • Transfers based on assessed price: Where there is no concluded price or where the price stated is unjustifiably low, the tax collection department shall determine the price based on the appraised price, where applicable. Otherwise, the price will be based on the standard price for the land.

    The appraised price is the price as appraised by realty appraisal institutions approved by the government, based on the conditions of the same location and same type of property. The appraised price has to be approved by the local tax authorities.

    The standard price for the land is based on the standard land prices published by the People's Government at or above the county level.

Appropriations of State Land-Use Rights

Where State land-use rights are obtained originally by appropriation, and later by transfer, as approved, the tax base shall comprise the land transfer charges and other transfer expenses that should be made up.

Gifting of Land-Use Rights, Houses

Where land-use rights or houses are gifted, the tax base shall be the assessed price.

The tax collection department shall base the assessed price on market prices achieved for the sales of similar land-use rights, or for the purchases or sales of similar houses.

Exchanges of Land-Use Rights, Houses

Where land-use rights or houses are exchanged, the tax base shall be the difference between the prices of the land-use rights being exchanged, between the prices of the houses being exchanged, or between the prices of the land-use rights and the prices of the houses being exchanged.

Special Instances

Assessed Prices

In the following circumstances, except where State land-use rights are obtained through agreements, the tax collection department shall assess the tax base with reference to market prices:

  • Where the concluded price is obviously lower than market prices without justifiable cause.
  • Where the price difference for exchanges of land-use rights or houses is obviously not rational.
Land-Use Rights Obtained Through Appropriation

Where land-use rights are received through appropriation, the transferor should, in the course of approving the transfer of the real estate, make good the tax, based on the charges for the land-use rights or on the proceeds from the land paid by the transferor.


Applicable tax rates range from 3% to 5%.

Determination of Applicable Rates

The specific applicable rates shall be determined by the People's Government at the provincial level, but within the stipulated range, after considering local conditions. The rates adopted shall be filed with the Ministry of Finance and the SAT.

Current Rates Adopted by Province/Region

The following provinces and regions have adopted the rates as listed:

  • Beijing, Tianjin, Shanxi, Inner Mongolia, Shanghai, Zhejiang, Fujian, Shandong, Guangdong, Guangxi, Hainan, Chongqing, Yunnan, Guizhou, Shaanxi, Qinghai, Gansu, Ningxia, Xinjiang: 3%.
  • Hebei, Jiangsu, Anhui, Jiangxi, Henan, Hubei, Hunan, Sichuan: 4%.
  • Heilongjiang, Jilin: 5% for commercial houses; 4% for other items.
  • Liaoning: 4% for commercial houses; 3% for other items.
  • Tibet:This tax is not levied currently.


In general, the following formula is used to compute tax payable:

Tax payable = Tax base × Applicable rate


An enterprise bought the use rights for a tract of land at a concluded price of 10 million yuan. The local applicable tax rate is 3%.

Tax payable = 10 million yuan × 3% = 300,000 yuan


Mr Zhang and Mr Li exchanged houses. Mr Zhang paid the price difference of 50,000 yuan to Mr Li. The local applicable tax rate is 5%.

Tax payable by Mr Zhang = 50,000 yuan × 5% 2,500 yuan

Exchange Rate Conversions

Tax payable is computed in yuan terms. Where payments for transfers of land/house property titles are made in foreign currency, the amounts should be converted into yuan at the exchange rate quoted on the day that the tax liability arises.


General Guidelines

Application Procedures and Policies

Submitting Applications

Taxpayers eligible for exemptions/reductions should submit their applications to the tax collection department in the locales where their land or houses are situated. Where the taxable value exceeds 0.1 billion yuan, the formalities shall be handled by the tax collection departments at the provincial level.

The taxpayers should provide all relevant materials within 10 days of the date that the transfer contracts are signed.

Filing Applications with the SAT

Where taxable value exceeds 0.1 billion yuan, the tax collection department shall file the applications with the SAT within 30 days of the date that the exemption or reduction formalities are completed.

Where the taxable value is less than 0.1 billion yuan, rules for filing shall be formulated by the tax collection department at the provincial level.

Determining Eligibility

State Takeovers/Occupations of Properties

Where land/houses are taken over or occupied by the People's Government at the county level or above, it shall be the responsibility of the People's Governments at the provincial level to determine whether or not exemptions/reductions should be granted to the transferees of the new land/houses.

Reimbursement of Reductions/Exemptions

Change in Usage

Where taxpayers have already been granted exemptions/reductions on their land/houses, but where they change the usage of the land/houses in such a way that they are no longer eligible for the exemptions/reductions, they shall make good the tax exempted or reduced.

Liability arises on the day that the titles of the land/houses are changed.

Some Common Exemptions, Reductions

The main exemptions and reductions allowed are discussed below.

First-Time House Purchases

Public Residences in Cities/Townships

Where employees in cities or townships purchase public residences for the first time, and where the residences do not exceed the standard size prescribed by the State, the purchases may be exempt. Approval has to be sought from the People's Government at the county level or above.

Purchases by Public Units for Employees

Where public units purchase the following buildings to resolve the housing problems of their employees, where the properties are then sold to the employees under the State house reform policy, and where the employees are purchasing houses for the first time, exemptions may be granted. Approval has to be sought from the house reform departments above the county level.

  • Ordinary residential buildings constructed through fund pooling.
  • Ordinary commercial buildings.


Homes Lost to Force Majeure

Where force majeure causes individuals to lose their original residences and to purchase new residences as a result, appropriate exemptions/reductions may be granted.

Homes Lost to Dismantling/Removal

Where individuals purchase new houses because their original houses were subject to dismantling/removal by the State, that portion of the transacted price of the new houses equivalent to the dismantling compensation may be exempt.

Reorganization-Related Transfers

Where enterprises undergo any of the following reorganizations or changes, exemptions/reductions may be granted for transfers related to the reorganizations:

  • Restructuring to form a company, or equity restructuring.
  • Mergers or split-ups.
  • Sales, shutdowns, or bankruptcies.
  • Other forms of reorganization.

Transfers of Use Rights for Barren Land

Where land-use rights for barren mountains, trenches, hills or barren beaches for transferred for the following purposes, the transferees may be exempt:

  • Agriculture.
  • Forestry.
  • Animal husbandry.
  • Fishing and fisheries.

Transfers to Diplomatic Missions/Personnel

Where the following diplomatic missions or personnel receive land/house property titles in China, and where they should be exempt from taxes under China's laws, or under international conventions/agreements signed by China, exemptions may be granted, upon recognition by the Ministry of Foreign Affairs.

  • Embassies and consulates in China.
  • United Nations representative offices in China.
  • Diplomatic representatives.
  • Consulate staff and other personnel.


  • Where government organs, institutional units, social organizations, and military units receive land or houses for office work, teaching, medical treatment, science and research, or military facilities, exemptions may be granted, upon approval by the relevant departments.
  • Where enterprises, institutions, social groups and other social organizations, and individuals receive land or buildings for the establishment of educational institutions open to all members of society, and where the transfers employed non-financial education funds, exemptions may be granted, upon approval by the relevant departments.
  • Where taxpayers purchase public houses, and where land transfer charges and other expenses have been paid to bring the houses under completely private ownership, the title transfers may be exempt.
  • Where taxpayers make private purchases of ordinary residences for self-use, they may be granted 50% reductions.
  • Other exemptions/reductions as stipulated by the Ministry of Finance.


Liability to Pay Tax

Liability arises at different times depending on the nature of the transaction.

  • Transfers of land/house property titles: On the day that the contracts are signed.
  • Transfers of land/house property titles of a contractual nature: On the day that the relevant documents (e.g., deeds, agreements, contracts, receipts, letters of recognition) are received.

Time Limits for Payment

Taxpayers should report to the tax collection department in the locale where their land or houses are situated, within 10 days of the date that liability for tax payment arises. They should then pay tax within the time limit specified by the tax collection department.

Registration of Title Changes

Taxpayers who wish to register changes in land/house property titles should bring the tax payment receipts, and other required documents and materials, to the Land Administration Department and the house property administration department to complete the formalities.


Incomplete Transactions

Where two trading parties sign a purchase and sale contract for a house, but fail to complete the transaction later, any tax that has already been paid may be rebated after the formalities for returning the house have been completed.