China does not have a nationwide property tax on residential homes. Owner-occupied housing is exempt from the country’s main Real Estate Tax, which applies instead to commercial buildings, industrial property, and rental income. Only two cities, Shanghai and Chongqing, tax certain residential properties under pilot programs that have run since 2011. Homeowners elsewhere pay no recurring tax on the value of their homes, though several taxes apply when property changes hands.
Why China’s Property Taxation Looks Different
All land in China belongs to the state or to rural collectives. No individual or company owns land outright. What you buy when you buy a home is a land use right for a fixed period: 70 years for residential land, 50 years for industrial land, and 40 years for commercial land.1National People’s Congress of the People’s Republic of China. Land Administration Law of the People’s Republic of China
That structure shapes everything. There is nothing to tax as “land ownership” because no one owns land. Local governments have also raised enormous revenue by selling new land use rights to developers, which reduced the political need to introduce a recurring tax on homeowners.
The Two Cities That Tax Residential Homes
Shanghai and Chongqing are the only places in China with an active residential property tax, and the two programs work differently.2Lincoln Institute of Land Policy. China’s Property Tax Reform
Shanghai
Shanghai taxes newly purchased second homes for local residents and first homes for non-residents. Each household member receives a 60-square-meter exemption, so a family of three can hold up to 180 square meters before any tax applies. Only the area above the threshold is taxed.
The rate ranges from 0.4% to 0.6%, applied to 70% of the transaction price. Properties priced below twice the citywide average for new housing qualify for the 0.4% rate. For 2026, the taxable price threshold sits at 92,536 yuan per square meter.
Chongqing
Chongqing focuses on high-end housing rather than ordinary second homes. It covers single-family houses, high-end apartments, and second homes purchased by people without local household registration, employment, or business ties to the city.
From January 2024, Chongqing moved to a uniform 0.5% rate, replacing a tiered structure that had run from 0.5% to 1.2%. The tax is calculated on 70% of the transaction price. The tax-free threshold for single-family and high-end housing rose from 100 to 180 square meters.
Neither pilot has produced significant revenue. They exist to test the mechanics of a residential property tax and to gauge public reaction before any national move.
What the National Real Estate Tax Actually Covers
China’s Real Estate Tax, in force since 1986, is often misread as a general property tax. It is not. Owner-occupied residential homes are exempt. The tax applies to commercial, industrial, and rental property, with two calculation methods depending on use:
- Owner-occupied commercial or industrial property is taxed at 1.2% of the residual value, which is the original purchase price minus a 10% to 30% deduction set by local authorities.
- Rented property is taxed at 12% of the rental income received.3AsianLII. Provisional Regulations of the People’s Republic of China on Real Estate Tax
If you rent out your home, that rental income falls under the 12% rate. If you live in the home yourself, no Real Estate Tax applies. Government agencies, the military, temples, public parks, and state-funded institutions are exempt from the tax altogether, and nonprofits that use their properties directly often qualify for exemptions as well.
Taxes When Buying or Selling a Home
Even without an annual tax, homeowners pay several taxes at the transaction stage. These have been cut repeatedly since 2024 to support a weak property market.
Deed Tax
Buyers pay a deed tax when they acquire a property. Effective December 1, 2024, the rates are:
- First or second home, 140 square meters or less: 1%
- First home, over 140 square meters: 1.5%
- Second home, over 140 square meters: 2%4State Council of the People’s Republic of China. China Launches Tax Policies to Support Property Market
Previous rates ran as high as 3% for second homes. The reduction was designed to lower transaction costs during the market downturn.
Value-Added Tax on Resales
Individuals selling a home pay VAT based on how long they’ve owned it. Homes held for two years or more are exempt. Homes held less than two years are taxed at 3%, reduced from 5% in a change announced in late 2025.5State Council of the People’s Republic of China. China to Cut VAT Rate to 3 Pct for Housing Sales Held Under 2 Years
Land Appreciation Tax
A separate Land Appreciation Tax applies to gains from transferring land use rights and buildings. Individuals selling their own homes are exempt. The tax primarily affects developers and commercial property investors.
Is a Nationwide Property Tax Coming?
In October 2021, the Standing Committee of the National People’s Congress authorized the State Council to expand residential property tax pilots to additional cities for a five-year trial period. The authorization covered “all types of residential and non-residential real estate” while exempting rural homesteads. Around ten regions were reportedly under consideration, including Shenzhen and Hainan Province.
Then the property market cracked. Developers including Evergrande fell into crisis, home sales dropped sharply, and consumer confidence collapsed. Beijing shifted from cooling an overheated market to stabilizing a falling one. The expanded pilots were quietly shelved. As of early 2026, no new cities have joined the pilot, and the 2021 authorization is approaching its midpoint with no visible progress toward national legislation.
The underlying pressure for a property tax hasn’t gone away. Local governments still depend heavily on one-time land sale revenue, which is drying up as urbanization matures and developers pull back. A recurring property tax would provide stable local revenue. Most analysts expect reform to remain on hold until the property market finds a floor.
What Foreign Buyers Should Know
Foreigners can buy residential property in China, but with restrictions in place since 2006 and tightened in 2010. A foreign individual must have studied or worked in China for at least one year before purchasing, and is limited to a single property for personal use. Recent reforms by the State Administration of Foreign Exchange allow overseas buyers to use converted yuan for down payments immediately after signing a purchase agreement.6Sixth Tone. China’s Latest Reform Eases Property Purchases for Overseas Individuals
Foreign buyers pay the same transaction taxes as Chinese citizens, including deed tax and VAT on resales. Some cities layer on additional requirements, such as proof of local tax payments or social insurance contributions for a minimum number of years. These local rules change frequently, so check with the local housing authority before committing to a purchase.