China plans tax cuts for home purchases to boost market

It underscores govt's greater willingness to use fiscal tools to shore up economy

China is planning to cut taxes on home purchases as the government dials up fiscal support to revive a moribund housing market, according to people familiar with the matter.

Regulators are working on a proposal that would allow megacities, including Shanghai and Beijing, to cut the deed tax for buyers to as low as 1 per cent from a current level of as much as 3 per cent, the people said. City governments have leeway to tweak the rules, the people added.

The plan, hinted at on Nov 8 by Finance Minister Lan Fo'an, underscores Beijing's increased willingness to use fiscal tools to shore up the sluggish economy along with monetary easing.