Since the unified real estate tax system came into effect in 2016, the tax rates for real estate transactions have been divided into 45%, 35%, 20% and 15%.
If you meet certain self-residence conditions, you can enjoy a tax exemption of up to 4 million yuan, and the preferential tax rate of 10% has become the key to tax saving planning for many people.
If the conditions are not fully met, the six years will have to be recalculated, which may result in missing the opportunity to sell and failing to achieve the tax savings.
Let me give you a practical example:
A certain citizen owns a house, which is not rented out or used for business and is used for his own residence for a long time.
He originally thought that by registering the property under the name of his then 12-year-old son, he could activate the six-year 4 million tax-free status after the deadline.
Unexpectedly, after the six-year period expired and when I was ready to sell the house, I was told that it did not meet the preferential conditions for owner-occupied housing.
The reason is that the son who originally registered the household registration has reached the age of 18 and has lost the eligibility for "registration of a minor child", resulting in the inability to enjoy the 4 million yuan tax exemption and the 10% tax rate benefits.
According to Article 4-5 of the Income Tax Act, in order to be eligible for the land tax benefits for self-occupied residences, the following three conditions must be met:
1. The subject matter of the transaction must be registered by the taxpayer, his/her spouse or minor children, and held and actually occupied for more than six consecutive years.
2. The land shall not be rented out, used for business or operations during this period.
3. The same tax exemption provisions have not been applied in the past six years.
To avoid this kind of situation, the safest approach is for the homeowner himself or his spouse to register the property to ensure that all requirements are met.
If you are unable to register your household registration immediately because you own multiple properties, you should complete the household registration transfer as early as possible before your children reach adulthood so that your tax saving qualifications can be seamlessly transferred and you can achieve the maximum tax benefits.
Specializing in cases related to land administration, many special practices are really interesting. In today's era of advanced Internet and information explosion, many people think that they can handle it well by looking up the provisions. However, they don't know that there are many traps in the regulations that they don't pay attention to. Often, a slight mistake will lead to a huge loss.
You really can't save the money you should spend on professional training. Just to save ten or twenty thousand, you end up losing millions and wasting time. Don't you think it's not worth it?
This website does not have those annoying ads that block the webpage and hinder reading!
If you think the article I wrote is helpful to you, could you please fill in a Questionnaire, allowing me to better understand everyone’s needs and write more high-quality content.