Is it necessary to pay property tax when renting land to build a house?
How to determine the original value of real estate? According to the Notice of the Ministry of Finance of People's Republic of China (PRC), State Taxation Administration of The People's Republic of China on Issues Related to Property Tax and Township Land Use Tax, the real estate taxed according to its original value, regardless of whether it is recorded in the fixed assets account book, should pay the property tax according to its original price. The original price of the house should be calculated according to the relevant accounting standards and rules of the state. Taxpayers who fail to conduct accounting and recording according to the national accounting standards and rules shall make adjustment or evaluation from the beginning according to the rules. If there is no original value of real estate as the basis, it shall be verified by the tax authorities where the real estate is located with reference to similar real estate. If the real estate is leased, the rental income of the real estate shall be the tax basis of the property tax.
According to the above rules, the house is built on the leased land in accordance with accounting standards, and the original value of the book property does not include the price of the leased land. However, some provinces and cities have made the following different regulations. If the lessor or borrower borrows other people's land to build a house and the land use right is not recorded, it is not necessary to include the land price in the original value of the property and levy property tax.
The land occupied by the taxpayer's real estate is leased on state-owned land, and the rent paid by the taxpayer should be combined with the original value of the real estate; If the collective land use right is obtained by renting, the rent paid by it will not be included in the original value of the property for the time being. The above rent is subject to the total amount agreed in the contract.
Provisions of the State on Paying Property Tax on Building Leased Land
Tax policy at the national level: 1. According to the Provisional Law of People's Republic of China (PRC) on Property Tax. Property tax is calculated and paid according to the residual value after deducting 10% to 30% from the original value of the property. The specific deduction standards shall be formulated by the people's governments of provinces, autonomous regions and municipalities directly under the Central Government. If there is no original value of real estate as the basis, it shall be verified by the tax authorities where the real estate is located with reference to similar real estate. If the real estate is leased, the rental income of the real estate shall be the tax basis of the property tax. If the property tax is paid according to the residual value of the property, the tax rate is1.2%; If paid according to the rental income of real estate, the tax rate is 12%.
2. According to Article 3 of the Notice of State Taxation Administration of The People's Republic of China of the Ministry of Finance on Land Use Tax Policy of Township Employment Units, the original value of the property taxed according to the original value of the property should include the land price, including the price of land use rights and the cost of land development funds. If the plot ratio is less than 0.5, the land area shall be calculated as 2 times of the construction area of the real estate, and the land price included in the original value of the real estate shall be determined accordingly.
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