CHINA Trends and Developments Contributed by: Zheyuan Jin, Xiang Mao, Lingyue Sun and Yi Wu, Merits & Tree Law Offices
lage transformations. Shanghai introduced the Historical Landscape Protection Guidelines and a dedicated fund management system, ensuring the protection and sustainable use of its cultural heritage. Government Policies to Stimulate the Residential Property Market In 2024, following the decline in housing prices and a comparative downturn in the housing mar - ket, local governments across China introduced various policies to stimulate residential property transactions and support the real estate market. These measures include: • reducing or exempting deed taxes to lower transaction costs; • gradually relaxing home purchase restrictions to expand buyer eligibility; • removing the distinction between “ordinary” and “non-ordinary” housing to simplify pur - chasing criteria; and • lowering payment ratios for home loans to enhance affordability. These efforts aim to boost market activity, sta - bilise the housing sector and meet the diverse housing needs of residents, reflecting a broader strategy to promote economic recovery and social stability. In 2024, the Ministry of Finance, the State Taxa - tion Administration, and the Ministry of Hous - ing and Urban-Rural Development jointly issued the Announcement on Tax Policies to Promote the Stable and Healthy Development of the Real Estate Market. The announcement raised the area threshold for deed tax preferential policies from 90 square meters to 140 square meters. For families purchasing their first home, the deed tax rate for properties between 90 and 140 square meters was reduced from 1.5% to 1%. For fami -
lies purchasing their second home, the deed tax rate was unified at 1% for properties not exceed - ing 140 square meters, while the rate for prop - erties above 140 square meters was reduced from 3% to 2%. Additionally, provincial, autono - mous regional and municipal governments were authorised to formulate specific implementation measures based on local conditions. The home purchase restrictions were gradu - ally eased during the course of 2024. Taking Shanghai as an example, the process began with adjustments to eligibility criteria, allowing non-local residents with longer social security or tax payment records to qualify for home pur - chases. The city also expanded the categories of eligible buyers, including talent and key indus - try professionals, to support urban development goals. By mid-2024, Shanghai introduced pilot programmes in certain districts, further loosen - ing restrictions and testing market responses. These incremental changes reflected a cau - tious yet proactive approach to revitalising the housing market while maintaining stability and addressing diverse housing needs. The government implemented a series of poli - cies to lower down payment ratios for home purchase loans. The central bank and financial regulators reduced the minimum down pay - ment ratio for first-time homebuyers from 30% to 20% in many cities, while the ratio for second homes was lowered from 40% to 30%. These adjustments were part of broader efforts to ease financial burdens on buyers and boost market activity. Local governments were also granted flexibil - ity to tailor down payment requirements based on regional market conditions. Major cities like Beijing, Shanghai and Shenzhen adopted these reductions, with some introducing additional
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