China plans tax cuts for home purchases to boost market

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

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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.