(1) Taxpayers

The taxpayers of Deed Tax are those enterprises, units, individual household businesses and other individuals who are the transferees of house property transferred within the territory of China.

(2) Tax base

The Deed Tax is normally based on one of followings:

a. The transactional price in case of sale/purchase of houses or sale or use right of State-owned land;

b. Assessment made by tax collection offices in reference to the market price of land use right sale or house sale in case of transferring land use right or house as gift; or

c. The difference of the land use right price and the house price in case of exchange of land use right and house.

(3) Tax rates and computation of tax payable

Deed Tax adopts a flat rate within the range of 3%-5%. The rate applicable in jurisdictions at provincial level shall be determined within the above range by the government at the provincial level. The formula for computing the tax payable is:

Tax payable = Tax base ×Applicable rate

(4) Major tax exemptions and reductions

The Deed Tax exemptions may be granted on the land and houses received by the Governmental organs, institutions, social organizations and military units for the use of offices, lecturing, medical treatment, scientific research and military facility; the State-owned house purchased for the first time by employees in cities and towns in conformity with relevant rules; the use right of barren mountains, barren gullies, barren hills and/or barren beaches received for use in agriculture, forestry, animal husbandry and/or fishery industry; and those diplomatic organizations and staff satisfying the relevant rules of tax exemption. Residential houses purchased as a result of house loss due to force majeure may be given tax reduction or exemption.