Beijing-A key component of China’s economic strategy hinges on a healthy property market, and today authorities announced an extension of an existing tax policy aimed at bolstering housing turnover and upgrades. The Ministry of Finance, National Taxation Administration, and Ministry of housing and Urban-Rural Advancement jointly announced the continuation of the individual income tax break, effective through the end of 2027, offering relief to homeowners seeking to reinvest in new properties [[1]]. This policy extension comes as China navigates a period of moderate economic growth and seeks to stimulate domestic consumption.
Beijing, January 15, 2026 — Chinese authorities have extended a preferential individual income tax policy designed to support residents upgrading their housing, according to a recent announcement.
A joint statement released Wednesday by the Ministry of Finance, the National Taxation Administration, and the Ministry of Housing and Urban-Rural Development detailed that the policy will be effective January 1, 2026, and remain in effect through December 31, 2027.
The policy allows taxpayers who sell their owned homes and purchase another within one year to reclaim individual income tax previously paid on the sale. This measure aims to encourage housing turnover and facilitate upgrades for homeowners.
Taxpayers who purchase a new home at a price equal to or exceeding the sale price of their original residence will receive a full tax refund. If the new home is purchased for a lower price, the tax refund will be issued on a proportional basis.
To qualify for the preferential policy, both the sale and purchase of the homes must occur within the same city. Additionally, the taxpayer selling the home must be the owner, or one of the co-owners, of the newly purchased property.
The extension of this tax policy signals continued efforts by the Chinese government to stabilize the property market and support consumer spending within the housing sector, a key component of the national economy.
