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(1) Taxpayers
The taxpayers of Land Appreciation Tax include enterprises, units,
individual household businesses and other individuals who receive
income from a disposal or other means of transfer with consideration
of State-owned land use rights, buildings on land and their attached
facilities (hereinafter referred to as transfer of real estate).
(2) Tax base and tax rates
The Land Appreciation Tax is based on the appreciation amount derived
by the taxpayer from the transfer of real estate, which equals to
the balance of proceeds received by the taxpayer on the transfer
of real estate after deducting the sum of deductible items as prescribed.
The Land Appreciation Tax adopts four levels of progressive rates;
Table of Land Appreciation Tax Rates
| Level |
Tax base |
Tax rates |
| 1 |
That part of the appreciation
amount not exceeding 50% of the sum of deductible items |
30% |
| 2 |
That part of the appreciation
amount exceeding 50%, but not exceeding 100%, of the sum of
deductible items |
40% |
| 3 |
That part of the appreciation
amount exceeding 100% , but not exceeding 200%, of the sum of
deductible items |
50% |
| 4 |
That part of the appreciation
amount exceeding 200% of the sum of deductible items |
60% |
(3) Computation of tax payable
To calculate the amount of Land Appreciation Tax payable, the first
step is to arrive at the appreciation amount derived by the taxpayer
from the transfer of real estate, which equals to the balance of
proceeds received by the taxpayer on the transfer of real estate
after deducting the sum of relevant deductible items. Then the amount
of tax payable shall be calculated respectively for different parts
of the appreciation by applying the applicable tax rates in line
with the percentages of the appreciation amount over the sum of
the deductible items. The sum of the amount of tax payable for different
parts of the appreciation shall be the full amount of tax payable
by the taxpayers. The formula is:
Tax payable = Σ (Part of appreciation ×Applicable rate)
(4) Major exemptions
The Land Appreciation Tax shall be exempt in situations where the
appreciation amount on the sale of ordinary standard residential
buildings construction by taxpayers for sale does not exceed 20%
of the sum of deductible items and when the real estate is taken
over or repossessed in accordance to the laws due to the construction
requirements of the State.
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