Interpretation by Xinhua News Agency: What benefits will "buying a house without buying a loan" bring to homebuyers?
Promote the implementation of the policy measures of "recognizing a house without recognizing a loan" for purchasing the first home, and continue to implement personal income tax policies related to supporting residents to purchase houses... Recently, China's real estate policy has been continuously adjusted and optimized. What convenience and benefits will these policies bring to residents when purchasing houses?
The Ministry of Housing and Urban Rural Development, the People's Bank of China, and the State Administration of Financial Supervision recently jointly issued a notice on optimizing the criteria for determining the number of housing units in personal housing loans. The notice clearly states that when a resident family applies for a loan to purchase commercial housing, if their family members do not have a complete set of housing under the local name, regardless of whether they have used the loan to purchase housing, banking and financial institutions will implement the housing credit policy for the first set of housing.
"Recognizing a house" or "recognizing a loan" is the standard used by banks to evaluate the first and second homes when issuing housing mortgage loans. Among them, "recognizing a house and recognizing a loan" is the most strict, referring to the practice of even if the first home loan has been fully repaid, but due to a loan record, it is still considered to have purchased a second home when replacing it, thus implementing a higher proportion of down payment and mortgage interest rates.
Pu Zhan, a researcher at the Policy Research Center of the Ministry of Housing and Urban Rural Development, said that in cities where the "housing recognition does not require loan recognition" policy is implemented, families, including borrowers, spouses, and underage children, as long as there is no housing in the local area, even if there is a loan record, can implement the loan policy based on the first home purchase, enjoy down payment ratio and interest rate discounts.
For replacement families, the policy of "buying a house without buying a loan" will bring benefits. Ms. Chen, a resident of Fuzhou, has been pregnant for 6 months and is looking forward to the early implementation of the new policy. "After the baby arrives, she wants to change to a bigger house." She calculated an account for the reporter: the 2.2 million yuan house she previously liked, according to current policies, requires a 40% down payment of 880000 yuan. If she can 'recognize the house without recognizing the loan', the down payment can be 30%, and the down payment can be reduced by 220000 yuan.
Lu Huaxiang, Director of the Housing and Residential Research Institute of the China Urban Planning and Design Institute, said that in some cities where there is a significant difference in the down payment ratio between the first and second homes, timely follow-up and implementation of the "no need to subscribe for loans" policy will bring more benefits to homebuyers.
For new citizens who have previously taken out a loan to purchase a house in another city but now have no house in the local area due to work relocation and other reasons, "buying a house without buying a loan" can help them lower the threshold for buying a house. Mr. Hao, a new resident of Guangzhou born in the 1990s, said that his family of three owns a house in Nanjing and has already paid off their mortgage last year. "But according to the situation of 'house recognition and loan recognition', if we buy a house for the first time in Guangzhou, even if we sell a house in Nanjing, we still need to pay a 70% down payment to buy another house. If 'house recognition does not require loan recognition' is implemented, we can still enjoy a 30% down payment qualification for the first house without selling a house in Nanjing, and the interest rate may also be based on the first house."
Some residential families, although they have already used loans to purchase housing, later sold their houses due to the need for funds for entrepreneurship, business, medical treatment, and children's education, but in reality, they no longer have housing under their name. Chai Qiang, President of the Chinese Society of Real Estate Appraisers and Real Estate Brokers, said that in the case of "recognizing a house without recognizing a loan", whether a homebuyer can enjoy the down payment ratio and interest rate discount of the first home loan essentially depends on whether the homebuyer currently has a house under their name. The implementation of this policy is more in line with the needs and reality of residents when purchasing a house.
In the case of "not needing to subscribe for a loan", the interest rate of the first home loan can be reduced, the "monthly payment" can be reduced, the payment ability for purchasing a house can be improved, and the burden of purchasing a house can be reduced. According to the monitoring of Beike Research Institute, in July 2023, the average mainstream mortgage interest rate for the first home in Baicheng was 3.90%, and the average mainstream mortgage interest rate for the second home was 4.81%. Taking Tianjin as an example, the interest generated by a 25 year loan of 1 million yuan under the condition of "house recognition without loan recognition" is 168000 yuan less than that under the condition of "house recognition loan recognition".
The notice clearly states that this policy, as a policy tool, will be included in the "One City, One Policy" toolbox for cities to choose independently.
Yu Xiaofen, Dean of the China Housing and Real Estate Research Institute at Zhejiang University of Technology, said that there are significant differences in the differentiation of China's real estate market between cities. The "housing recognition without loan recognition" policy has been included in the "one city, one policy" toolbox, allowing local governments to implement policies based on local real estate market supply and demand relationships and price trends, which can help build and improve long-term real estate mechanisms.
In terms of preferential policies for individual income tax on residents changing houses, the Ministry of Finance, the State Administration of Taxation, and the Ministry of Housing and Urban Rural Development recently issued a notice stating that from January 1, 2024 to December 31, 2025, taxpayers who sell their own houses and purchase new houses in the market within one year after the sale of their current houses will be eligible for a refund of the personal income tax already paid on the sale of their current houses.
According to the introduction, this policy can be summarized as "refundable individual income tax for changing houses". Industry insiders say that for most cities, changing houses can save 30000 to 50000 yuan in taxes, while some properties in cities such as Beijing can save more taxes. The situation of individual income tax collection varies depending on the transaction of the property.
"This is a policy that will continue to be implemented," said He Daixin, Director of the Finance Research Office of the Institute of Finance and Strategy at the Chinese Academy of Social Sciences. The personal income tax policy related to supporting residents to purchase housing, which was introduced by the Ministry of Finance and other departments last year, will expire at the end of this year. The three departments have explicitly extended this policy until the end of 2025, which will help to continue supporting residents to improve their housing conditions.
