China To Implement Mortgage Interest Deduction

iFeng: 媒体:房贷利息将出优惠政策 节省利息15%-45%
News, this year, the State Council approved the Development and Reform Commission "on the deepening economic reform in 2015 the views of focus" and proposed a tax reform program to study the synthesis and classification of a combination, and in 2017 put into legislation. Opinions special reference to "improve tax deduction" reform, one of the important content is to increase housing mortgage interest deduction and other special projects.

That is to say, mortgage interest can be deducted from taxable income before taxes, for the most part, this mortgage can save 15% to 45% interest on the money for individuals. But because it involves complex algorithms, whether the introduction of specific programs during the year, and unknown.

Barron's: China’s Home Sales Jumped 16% In November
Home sales in November jumped 16% from a year ago, data provided by Barclays show.

After a slew of interest rate cuts, it is now cheaper for middle class Chinese to buy properties. Mortgage loan rate for first-home purchases fell to a new record low of 4.66% in November, according to a survey by Rong360. Lending rate in Beijing came in even lower, at only 4.39%. Average mortgage rate was over 7% just a year ago.
The best reform for housing is whatever grows household income because ultimately, home prices are going to match changes in income. Making debt cheaper or adding tax deductions is a one-time boost that expands the potential debt and price levels.

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