(Promulgated by Order No. 138 of the State Council of the People’s Republic of China on December 13, 1993, and amended in accordance with Decision of the State Council on Repealing and Amending Some Administrative Regulations by Order No. 588 of the State Council on January 8, 2011)

Article 1 The Regulations is formulated to standardize the transaction order of land and real estate markets, reasonably regulate the gains from land appreciation and safeguard the rights and interests of the State.

Article 2 Entities and individuals (hereinafter referred to as taxpayers) that derive revenue from the transfer of state-owned land use right, and buildings and installations attached thereon (hereinafter referred to as transfer of real estate) shall pay land appreciation tax in accordance with the Regulations.

Article 3 Land appreciation tax shall be levied based on the appreciation amount that taxpayers derive from the transfer of real estate at rates specified in Article 7 of the Regulations.

Article 4 The appreciation amount shall be the balance of the revenue derived by taxpayers from the transfer of real estate after making deductions listed in Article 6 of the Regulations.

Article 5 Revenue derived by taxpayers from the transfer of real estate includes monetary revenue, revenue in kind and other revenues.

Article 6 Deductions calculated for the appreciation amount:

  (1) The amount paid for the acquisition of land use rights;

  (2) Costs and expenses for the development of the land;

  (3) Costs and expenses for the construction of new buildings and ancillary facilities, or the evaluated prices of old buildings and structures;

  (4) Taxes related to the transfer of real estate;

  (5) Other deductions as prescribed by the Ministry of Finance.

Article 7 Land appreciation tax shall be levied at four-level progressive rates:

For the portion of the appreciation amount which does not exceed 50 percent of the deducted amount, the tax rate is 30 percent.

For the portion of the appreciation amount which exceeds 50 percent but is less than 100 percent of the deducted amount, the tax rate is 40 percent.

For the portion of the appreciation amount which exceeds 100 percent but is less than 200 percent of the deducted amount, the tax rate is 50 percent. 

For the portion of the appreciation amount which exceeds 200 percent of the deducted amount, the tax rate is 60 percent.

Article 8 A taxpayer is exempted from land appreciation tax under one of the following circumstances:

  (1) The taxpayer constructs ordinary standard residential buildings for sale and the appreciation amount does not exceed 20 percent of the deducted amount;

  (2) Legal requisition and expropriation of real estate for state construction purposes.

Article 9 Land appreciation tax shall be calculated and collected based on the evaluated price of the real estate under one of the following conditions:

  (1) Concealment and falsification in reporting the transaction prices of properties;

  (2) False reporting of the amount of deductions;

  (3) The transaction price of the transferred property is lower than the evaluated price with no justified reasons.

Article 10 A taxpayer shall file taxes with the tax authority at the place where the property is located within seven days of the signing of the real estate transfer contract and pay the land appreciation tax within the period determined by the tax authority.

Article 11 Land appreciation tax shall be collected by tax authorities. The land administration department and the property administration department shall provide the tax authority with relevant materials, and assist the tax authority in collecting land appreciation tax in accordance with the law.

Article 12 The land administration department and the property administration department shall not process the relevant ownership change procedures for taxpayers who fail to pay land appreciation tax in accordance with the Regulations.

Article 13 Land appreciation tax shall be administered in accordance with the relevant provisions in Tax Collection and Administration Law of the People’s Republic of China and in the Regulations.

Article 14 The Ministry of Finance is responsible for interpreting the Regulations and formulating its implementation rules.

Article 15 The Regulations shall enter into effect from January 1, 1994. Local measures for the collection of land apprecaition fees that contravene the Regulations shall cease to be implemented simultaneously.

All information in this document is authentic in Chinese. English is provided for reference only. In case of any discrepancy, the Chinese version shall prevail.