The 8 tough measures by the Chinese government in hope to curb home prices required local governments to implement their own set of rules to fit their specific situations. It was reported earlier that the rules for Beijing was due to be announced. And after a bit of waiting, here comes the Beijing version of the latest rules (via Xinhua). There are 15 points listed in the announcement, but I am not going to translate all as not of them are worth mentioning, so here are some points that I think are important:
1. Increase supply of land and to ensure that 50% of the land provided this year will be earmarked for affordable housing, and the total supply of land earmarked for small- to medium-size housing and affordable housing will be no less than 70% of the total.
2. Strengthen the system for building affordable housing: aim at building, re-building, acquiring and entering into long-term leasing in order to provide 200,000 or more affordable housing in 2011, provide rental subsidy for 20,000 households, complete the construction of 100,000 affordable housing.
3. Develop public housing for rents, aiming at providing public rental housing for 10,000 or more households by the end of 2011.
4. Strict implementation of taxing the profit on resale.
5. Land Appreciation Tax: developers will be asked to pre-pay higher proportion of Land Appreciation Tax (LAT) if the appreciation is deemed too high. Government will also increase scrutiny for those real estate developments which are prices with high premium with nearby housing.
6. Loan-to-value ratio will drop to 40% for second-home buyer, and mortgage rate will be priced at 1.1x of standard rate (this is same as the original rule).
7. Increase scrutiny of participants of the land market: developers will have to state the sources of funds.
8. Beijing registered families own 1 home can only buy 1 more at most, and those who have already owned 2 homes will not be allowed to buy any more. Non-Beijing registered families with no residence permit or not paying social security or income tax in the past 5 years will also be banned from the real estate market.
9. This is rather funny: Media should stress the success of providing affordable housing and regulating the real estate market.
Will add more later, if I have anything to say.