1.         What taxes and charges should I pay to government in buying a resale house in Shanghai?

Taxes and charges may vary from place to place because local governments often offer different tax incentives or disincentives in light of the property market in its jurisdiction. To the extent of our practice in Shanghai, buyers will generally be required to pay the following charges and taxes to government:

(1)    Deed tax. This tax is solely levied on the part of buyer. For ordinary property, deed tax will be equal to 1.5% of the property value, and for non-ordinary property, it will be 3% of the property value.

(2)    Stamp duty. This tax is levied on both parties to the deal in an amount of 0.05% of the property value.

(3)    Transaction fee. This is calculated at the rate of RMB 2.5 per square meter.

(4)    Transfer registration fee. RMB 80.

(5)    Mortgage registration fee. RMB 200. It is applicable when buyer need to take out bank loan to finance its purchase and banks often require the buyers to mortgage the property to the banks as security for extending the loan.

(6)    Mapping fee. RMB 25.

It is always safer to bring with you a little more than your calculation of those items refereed to above to meet any unexpected costs.

Please be noted that, real estate taxes change all the time in line with the fluctuation of the property market. For more information in that regard, please click the following link for more: http://www.doroto.com/english/seriesDetial.asp?id=154&bigclass_id=Real%20Estate.

Please also be advised that taxes associated with retail or commercial property transaction differs a lot from residential property. The aforesaid taxes here are in relation to residential property deals only.

2.         What is the criterion for differentiating the ordinary house from the non-ordinary house?

The criterion for ordinary houses varies from city to city and even in the same city, it also changes in line with the local property market and economic level. At present, the local standard thereof in Shanghai has recently been revised on November 1, 2008.

Now in Shanghai, the ordinary houses refer to those houses in multi-story building (five or more stories) and old-style apartments in buildings of less than five stories and the new or old-style lane houses, with an area of less than 140 square meters and of a value of less than RMB 2,450,000 (located within the inner ring area), RMB 1,400,000 (located between the inner ring and middle ring area or RMB 980,000 (located in the rest of Shanghai).

That means most of those villas and luxury apartments belong to the non-ordinary houses, subject to heavier tax burden.

There will be more FAQs coming soon. You may contact us for other information directly at phones: 00-86-13816548421 (Mp) and 00-86-21-50383762, or at email: doroto@163.com. We will be delighted to offer our service to you.