Beijing has taken drastic measures in an effort to avoid a housing slump. It has cut mortgage rates by up to 30 percent in some cases, stopped stamp duty and reduced tax on home buying in a new range of policies.
The Ministry of Finance published a statement confirming that the property deed tax is being reduced from 3-5 percent to just 1 percent for those buying their first home if the property is smaller than 90 square metres. This takes effect from the 1st November.
In addition, first time buyers will only need to find a 20 percent deposit rather than the current 30 percent and the mortgage lenders are now able to give up to a 70 percent discount from the benchmark interest rates on their mortgages.
The emergency meeting was chaired by the Premier Web Jiaboa, who advised that the new policies will also remove the land value-added tax from November and the stamp duty of 0.05 percent.
These policy changes were put in place after the National Bureau of Statistics released figures showing that the country’s annual GDP (gross domestic product) in the third quarter this year has slowed harshly to 9 percent from 10.1 percent in the second quarter.
It remains to be seen what other measures the British government will put in place to help revive the property market and general economy in the UK, but the Bank of England’s Monetary Policy Committee is expected to reduce interest rates yet again this month.