Shanghai Adjusts Real Estate Policies: Easing Restrictions and Lowering Costs

Shanghai adjusts real estate policies, easing purchase restrictions, lowering down payment requirements, and eliminating the distinction between ordinary and non-ordinary housing. The social security or tax payment period for non-local residents to purchase homes is shortened to one year, and those with a residence permit meeting the points threshold enjoy the same treatment as local residents. The new area of the Free Trade Zone in Lingang implements differentiated housing policies to promote job-residence balance. Mortgage interest rates are reduced, with the down payment ratio for first homes lowered to 15% and for second homes to 20%-25%. The exemption period for value-added tax on property sales is reduced from five years to two years, and the standard for distinguishing between ordinary and non-ordinary housing is abolished. The policy takes effect from October 1, 2024.

Explanation:

• Purchase Restrictions: Policies that limit the number of properties one can buy and the qualifications required.
• Down Payment Ratio: The percentage of the property price that must be paid upfront as a down payment.
• Exemption Period for VAT: The holding period of a property before selling it, after which value-added tax is exempt.
• Distinction between Ordinary and Non-Ordinary Housing: The criteria used to differentiate between ordinary and non-ordinary housing.