SHENZHEN, May 11 -- The Shenzhen city government has increased the ceilings for tax exemptions on housing purchase following the recent price hikes in the property market.

    Under the new rule, the upper limits for contract amounts that will be eligible for tax exemptions are: 11,000 yuan (US$1,375) per square meter for Luohu District, 11,500 yuan for Futian, 11,000 yuan for Nanshan, 10,500 yuan for Yantian, 7,500 yuan for Bao¡¯an and 7,000 yuan for Longgang.

    The price ceilings are about 20 percent more than the average property prices in the six districts. Apartments costing less are regarded as "ordinary apartments" and enjoy the tax exemption provided that the floor space is less than 144 square meters. Other houses are regarded as "luxury houses," which are not eligible for tax exemptions.

    Home buyers purchasing luxury houses have to pay 3 percent of the purchase amount in tax, while those purchasing non-luxury houses only have to pay 1.5 percent of the house value.

    Meanwhile, people who sell non-luxury apartments after two years of purchase will be exempt from business tax, which amounts to 5 percent of the profit from the sale for "luxury houses." Enditem

    (Source: Shenzhen Daily)