The Ministry of Finance and State Taxation Administration of The People's Republic of China issued preferential tax policies in 2008 to support the development of the housing rental market and the construction of low-rent housing and affordable housing. This circular, entitled "Notice on Tax Policies for Affordable Housing and Housing Leasing in Low-rent Housing" (hereinafter referred to as the "Circular"), stipulates that individuals who purchase affordable housing will be subject to deed tax at half the statutory tax rate; The rental income of low-rent housing management units shall be exempted from business tax and property tax; Personal income tax is reduced by 10% on the income obtained by individuals renting houses. The Notice stipulates that from March 1 day, 2008, personal income tax will be levied at the reduced rate of 10% on the income obtained by individuals renting houses; Lease contracts signed by individuals for renting or renting houses shall be exempted from stamp duty; For individual rental housing, business tax is halved on the basis of 3% tax rate, property tax is levied at 4% tax rate, and urban land use tax is exempted; For enterprises, institutions, social organizations and other organizations to rent housing to individuals at market prices, the property tax will be levied at a reduced rate of 4%.

"A perfect real estate market should not only include buying and selling houses, but also renting houses is a big piece." Liu Huan, deputy dean of the School of Taxation of the Central University of Finance and Economics, said, "Moreover, this can alleviate the pressure of high prices in our current real estate market." However, according to the analysis of real estate agents, lowering the tax rate of individual rental housing does not mean that the rental price will be lowered. The "Notice" stipulates that the deed tax will be halved on the basis of the statutory tax rate for individuals to purchase affordable housing. In addition, the "Notice" also stipulates that the monetary subsidies for low-rent housing obtained according to regulations are exempt from personal income tax; If an individual donates a house as a low-rent house, the part of the donation that does not exceed 30% of his declared taxable income may be deducted from his taxable income. In addition to the preferential tax policies for individuals renting houses and purchasing affordable housing, the Notice also has preferential policies for enterprises, institutions and developers. The "Notice" stipulates that the land for low-rent housing, affordable housing construction and the land for low-rent housing rented by the management unit of low-rent housing to the specified security object at the price stipulated by the government shall be exempted from urban land use tax. Enterprises, institutions, social organizations and other organizations that transfer old houses as low-rent housing and affordable housing, and the value-added amount does not exceed 20% of the deducted project amount, shall be exempted from land value-added tax. The notice stipulates that the above-mentioned new preferential policies related to low-rent housing and affordable housing will be implemented from August 1 2007, and the tax paid before the date of arrival will be deducted from the tax payable in the future.