Notice of the General Office of Shanghai Municipal People’s Government on Transmitting the Opinions on Implementing the Essence of the Executive Meeting of the State Council in This Municipality to Further Promote the Healthy Development of the Real Estate Market Made by the Municipal Housing Administration and Four Other Departments

(December 29, 2009)

                                                SMPG GO G [2009] No. 58  

Attention: All District and County People’s Governments, and all relevant Commissions, Offices and Bureaus (Administrations) of the Municipal People’s Government:

The Opinions on Implementing the Essence of the Executive Meeting of the State Council in This Municipality to Further Promote the Healthy Development of the Real Estate Market made by the municipal housing administration, the municipal finance bureau, the municipal administration of local taxation, the municipal urban & rural construction and transportation commission, and the municipal planning and land resources administration have been approved by the Municipal People’s Government. We hereby transmit them to you and request you to implement them conscientiously.

Opinions on Implementing the Essence of the Executive Meeting of the

State Council in This Municipality to Further Promote the

Healthy Development of the Real Estate Market

With a view to conscientiously implementing the essence of the executive meeting of the State Council on inhibiting the house purchase for investment and speculation, curbing the too-fast rise in land and house prices, supporting this Municipality’s residents in house purchase for personal use or for improving house conditions, and further promoting the healthy development of the real estate market, the implementation opinions are hereby put forward as follows:
    I. Strictly implement all State level policies on real estate taxation and finance

1. Individuals who sell their non-ordinary residential house held for less than five years are levied full sales tax. Individuals who sell their non-ordinary residential house held for more than five years (including five years) or the ordinary house held less than five years are levied deed sales tax based on price difference with deduction of the sales incomes. Individuals who sell their ordinary residential house held more than five years (including five years) are exempted from sales tax.

2. For individuals who purchase a first residential house of 90 square meters or below, in line with ordinary residential housing standards, the deed tax shall be collected at the rate of one 1% with a proof of the first house purchase, issued by the municipal real estate trading center.

3. Individuals who transfer their sole ordinary household’s residential house held five years or more are exempted from income tax.　

4. The housing registration fee for individual purchase of ordinary residential houses and the transaction (transfer) handling charges for individual purchase or sale of stocking ordinary residential houses shall be restored.

5. The differential credit policy towards the house purchase for investment and speculation shall be intensified in a practical way to prevent housing loan risks of all kinds; the credit policy for the consumption of houses for personal use and for improving housing conditions shall still be adopted in accordance with the provisions of the document SC G [2008] No. 131, i.e., where a resident takes loan to purchase the first ordinary residential house for personal use, or a resident who has taken loan and purchased a residential house with a per capita housing area lower than the average level of the Municipality reapplies for a loan to purchase a second ordinary residential house for personal use to improve housing conditions, the loan interest rate and the minimum initial payment proportion shall continue to be implemented according to the preferential policy.

6. For those who purchase an ordinary residential house for personal use with the housing provident fund loan, the minimum initial payment proportion shall continue to be implemented according to the provision of not lower than 20% of the total price of the purchased house; for a household with two borrowers or more, the maximum loan limit per household remains at 600,000 yuan, and for a household with the supplementary housing provident fund, the maximum loan limit per household remains at 800,000 yuan; for a household with only one loan borrower, the maximum loan limit per household shall be 300,000 yuan, and the maximum loan limit of 400,000 yuan shall remain for the household with the supplementary housing provident fund.

7. For those who purchase a second ordinary residential house for personal use with the housing provident fund loan when their per capita housing area lower than the average level of this Municipality, the minimum initial payment proportion shall continue to be implemented according to the provision of not lower than 20% of the total price of the purchased house; for a household with two loan borrowers, the maximum loan limit per household shall be 400,000 yuan, and for a household with the supplementary housing provident fund, the maximum loan limit per household shall be 600,000 yuan; for a household with only one loan borrower, the maximum loan limit shall be 200,000 yuan, and for a household with the supplementary housing provident fund, the maximum loan limit shall be 300,000 yuan. As to the house purchase for investment and speculation, the policy of the housing provident fund loan shall be implemented in a strict manner.   
    II. Be strict in implementing the land supply policy, and increase land supply for ordinary commodity housing in an earnest way

8. Be further stricter in the land supply policy, and control the land parcels transfer area for commodity residence housing within 20 hectares. 

9. Strengthen the management of land transfer revenues and expenditures, normalize the behavior of land transfer revenues payment by installment, and the time limit for the total land transfer price paid by installment as agreed according to law in the land transfer contract by the state land and resources administrative department and the land transferee shall not be more than one year in principle (upon examination and approval, payment for special projects may be made in full within two years as agreed), with the initial payment proportion not lower than 50% of the total price of land transfer.     

10. Intensify the sorting out of idle land, and handle the illegal land stocking according to law. Accelerate the efficient use of State reserved construction-use land, improve land utilization efficiency, perfect the mode of residential housing land supply, give priority to the land supply for indemnificatory housing, and increase the land supply for ordinary commodity housing.

11. Intensify post-approval land management and construction site supervision, and urge real estate developers to strictly execute land transfer contracts and construction permits, and to accelerate the construction startup and pace under the preconditions of quality ensurance.        

III. Accelerate the establishment and perfection of an indemnificatory housing system, and actively push forward the construction of large-scale residential communities

12. Establish and perfect an indemnificatory housing system, and push forward in an all-round way the indemnificatory housing construction including low-rent housing, economically affordable housing, relocated commodity housing with complete facilities, and public rental housing. Guarantee and cover all the applicant families that are eligible for the access to low-rent requirements, and through the channels of building, rebuilding, or purchasing, arrange resources of low-rent housing, and improve the directly-provided housing proportion. Further enhance promotion of the economically affordable housing in a pilot way, and gradually broaden the access conditions in the light of the actual circumstances, and expand the construction and supply scale of economically affordable housing. Actively develop the construction of such public rental houses as units rental houses, apartments for talents, dorms for migrant workers, etc., and accelerate the establishment of a public rental housing system and operation system. Actively push forward the establishment of large-scale residential communities, further optimize the construction mechanism, implement the supporting policies, and accelerate the perfection and completion of municipal public facilities, social undertakings and commercial services.    

13. Actively push forward the old area renovation. Further define the renovation goals and tasks, strengthen policy support, and focus on the renovation of aggregations of shanty blocks Grade 2, shacks and shabby houses; continue to innovate on the old area renovation mechanism, and actively push forward the renovation mode of pre-consultation and multi-channel relocation. Vigorously push ahead with the comprehensive renovation and rectification of old houses of other kinds, improve housing quality, perfect the utilization function, and improve residents’ housing conditions.    

IV. Strengthen monitoring and supervision over the real estate market

14. Perfect the information release system for the real estate market. Adhere to a correct orientation in public opinion, and rationally guide the market anticipation; strengthen the qualification management of real estate developers, and enhance the quality management of commodity housing; further rectify the order of the real estate market, and strictly investigate and handle fictitious transaction, false advertising, property hoarding with no sales, forcing up housing prices, and such other acts in violation of laws or provisions; perfect the credibility system for real estate enterprises and employees, and guide real estate developers to fix rational prices.

15. Further improve the system of commodity house transaction. Strengthen the management of commodity house pre-sale and pre-order, normalize the act of commodity house sale, accelerate the implementation of reserved house transaction funds, and earnestly guarantee house purchasers’ legitimate rights and interests.

Items 1, 2, 3 and 4 of these Opinions shall be implemented as of January 1, 2010. 

Shanghai Municipal Housing Administration

Shanghai Municipal Finance Bureau

Shanghai Municipal Administration of Local Taxation

Shanghai Municipal Urban & Rural Construction and Transportation Commission

Shanghai Municipal Planning and Land Resources Administration

December 28, 2009

Key Words: Real Estate; Policy; Opinions: Notice