A share of home ownership usually refers to the percentage of ownership that a home buyer holds. When a property owner owns all the ownership of the house, this percentage is 100%. If there are multiple property owners, they can hold the common property in different ways, which is known as co-ownership or co-ownership. Co-ownership of a house by shares means that two or more units or individuals have rights and obligations to jointly owned a house according to their respective share. This share does not mean that the co-owned house is divided into several parts, each of which has the ownership of a separate part, but that the co-owners have rights and obligations in relation to the house as a whole. When registering the title for the first time, it is necessary to specify the status of co-ownership (by shares or jointly), the share of each co-owner, and record this information. Such a record will serve as the legal basis for dealing with the property in the future.
February** Dynamic Incentive Plan Co-ownership and co-ownership of a house are both forms of co-ownership of the same house, but there are differences between the two: co-ownership is based on the existence of a common relationship, such as the existence of family, husband and wife and other relationships are necessary conditions for co-ownership. Share-based ownership only needs to take place according to the will of the co-owners. Therefore, the difference between the two is more manifested in the different scope of rights enjoyed. In co-ownership, the co-owned house is not divided into shares, and the share of the co-owned property cannot be divided only if the co-ownership relationship exists, and it can only be divided when the co-ownership relationship is terminated. For example, A and B are husband and wife, and the house purchased jointly by them during the existence of the relationship between the husband and wife cannot be divided into which part belongs to whom. If the two divorce, they can be divided according to law. For example, if A and B share a house by share and agree that each person has half of the share, each person has 50% of the rights, and there is no change due to other factors.
The main reasons for the occurrence of co-ownership properties are::(1) Joint construction. Two or more persons shall, according to the agreement, jointly contribute, contribute, and contribute to the construction of a house in accordance with the law according to a certain proportion. After the completion of the house, it shall be distributed according to the proportion agreed in advance. (2) Joint venture purchase. The co-owners share the ownership of the house in proportion to their contributions. (3) Joint inheritance. Some of the houses in the estate cannot be divided into one person, and when they cannot be divided, the house can only be divided into several parts to be inherited by the heirs according to their shares, thus forming a joint property among them. It can be equal or unequal, but each person's share is clear. The co-ownership relationship before the division of the estate is a co-ownership relationship. (4) Joint donation. Refers to the joint acceptance of a gift or bequest of a house by multiple people.
Each co-owner has the right to dispose of his or her share; However, at the time of the transfer, the other co-owners have the right of first refusal under the same conditions. It follows from this that the consent of the other co-owners is not required for the disposal of the property by shares, but the other co-owners should be informed of the public transfer. If the transfer of property rights of more than one person is involved, all relevant persons need to jointly sign a written document and submit it to the relevant department for change registration. Is a change in the ownership share of a house taxable?
1. Value-added tax. A change in the share of property rights is also a sale of immovable property. If an individual sells his or her self-built immovable property, the tax payable shall be calculated at the rate of 5% based on the total price obtained and the off-price expenses; If an individual sells the immovable property (excluding the housing purchased by him/her) acquired (excluding self-built), the balance of the total price and off-price expenses obtained minus the original purchase price of the immovable property or the price made at the time of acquisition of the immovable property shall be the sales amount, and the tax payable shall be calculated at the rate of 5%. For the housing purchased by individual sales, except for Beijing, Shanghai, Guangzhou, and Shenzhen, individuals who will purchase housing for less than two years and sell it to the outside world will pay VAT in full at the rate of 5%.
Individuals who will purchase housing for more than 2 years (including 2 years) and sell it externally are exempt from VAT. For Beijing, Shanghai, Guangzhou, and Shenzhen: Individuals who will purchase housing less than 2 years old and sell it to the outside world will pay VAT in full at a rate of 5%; If an individual will purchase a non-ordinary house for more than 2 years (including 2 years) and sell it to the outside world, the difference between the sales income and the purchase price of the house shall be paid at a rate of 5%; Individuals who will purchase ordinary housing for more than 2 years (including 2 years) and sell it externally are exempt from VAT.
According to the Implementation Measures for the Pilot Project of Replacing Business Tax with Value-Added Tax (CS [2016] No. 36), if an individual donates immovable property or land use right without compensation under one of the following circumstances, it is temporarily exempted from VAT: division of property in divorce; Gifts to spouses, parents, children, grandparents, grandchildren, siblings; Gift free of charge to a caregiver or supporter who has the obligation of direct support or support; In the event of the death of the owner of the real estate, the legal heirs, testamentary heirs or legatees who have acquired the real estate in accordance with the law.
2. Land Appreciation Tax。According to Article 3 of the Notice of the Ministry of Finance and the State Administration of Taxation on Adjusting the Tax Policies for Real Estate Transactions (CS 2008 No. 137), the sale of housing by individuals is temporarily exempted from LAT levy. This notice shall come into force on November 1, 2008. Therefore, the sale of housing by individuals is temporarily exempt from LAT levy. The sale of non-residential properties by individuals shall be subject to LAT in accordance with the law.
According to the Notice of the Ministry of Finance and the State Administration of Taxation on Some Specific Issues Concerning Land Appreciation Tax (Cai Shui Zi 1995 No. 48), the owner of real estate and the owner of land use right shall not be subject to LAT if he or she donates the property right or land use right to his immediate family members or bears the obligation of direct support. Therefore, the gift of immovable property to immediate family members or persons with direct support obligations without compensation, whether residential or non-residential, is not subject to LAT levy.
3. Individual income tax. Article 3 of the Individual Income Tax Law of the People's Republic of China stipulates the tax rate of individual income tax: "(3) Income from interest, dividends and bonuses, income from property leasing, income from property transfer and incidental income shall be subject to a proportional tax rate of 20%. ”
The notice of the State Administration of Taxation on issues related to the adjustment of individual income tax levied on income from individual housing transfer (Guo Shui Fa No. 108 2006) stipulates that if a taxpayer fails to provide a complete and accurate voucher for the original value of the house and cannot correctly calculate the original value of the house and the tax payable, the tax authorities may implement the verification and taxation of the taxpayer according to the provisions of Article 35 of the Law of the People's Republic of China on the Administration of Tax Collection, that is, the individual income tax payable shall be determined according to a certain proportion (1%-3%) of the taxpayer's housing transfer income. The Notice of the Ministry of Finance, the State Administration of Taxation and the Ministry of Construction on Issues Concerning the Levy of Individual Income Tax on Individual Housing Income stipulates that the income obtained by individuals from the transfer of personal housing for personal use for more than 5 years and is the only living house of the family shall continue to be exempted from individual income tax.
The announcement of the Ministry of Finance and the State Administration of Taxation on the application of individual income tax taxable income items to relevant income obtained by individuals (Announcement No. 74 [2019] of the Ministry of Finance and the State Administration of Taxation) stipulates that if the owner of the property right of the house donates the property right to others free of charge, the donated income obtained by the donee due to the donated house shall be calculated and paid according to the item of "accidental income". At the same time, in accordance with Article 1 of the Notice of the Ministry of Finance and the State Administration of Taxation on Individual Income Tax Issues Concerning Houses Donated by Individuals Free of Charge (CS 2009 No. 78), no individual income tax shall be levied on both parties if the following circumstances are met: the owner of the house property right will donate the property right to his spouse, parents, children, grandparents, grandchildren, grandchildren, brothers and sisters; The owner of the property right of the house gives the property right of the house free of charge to the guardian or supporter who bears the obligation of direct support or support; The legal heirs, testamentary heirs or legatees who have obtained the property rights of the house in accordance with the law after the death of the owner of the property rights of the house.
4. Stamp duty. Article 657 of the Civil Code stipulates that a gift contract is a contract in which the donor gives his property to the donee free of charge, and the donee expresses his acceptance of the gift. The taxable contracts listed in the Stamp Duty Law include loan contracts, financial lease contracts, sales contracts, contract contracts, construction contracts, transportation contracts, technical contracts, lease contracts, custody contracts, warehousing contracts, property insurance contracts, etc.
It can be seen that the gift contract is not within the scope of stamp duty. However, in the "Stamp Duty Item and Tax Rate Table", the "transfer" in the tax item of the property right transfer document includes the sale and purchase (**inheritance, gift, exchange and division). The documents for the transfer of property rights include the documents for the transfer of land use rights; Documents for the transfer of ownership of buildings and structures such as land use rights and houses (excluding the transfer of land contracting and management rights and land management rights); Equity transfer documents (excluding the stamp duty payable on ** transactions); Documents for the transfer of the exclusive right to use trademarks, copyrights, patents, and know-how.
Therefore, if the gift contract falls within the scope of stamp duty on property right transfer documents, the stamp duty shall be calculated and paid according to the corresponding tax rate of property right transfer documents, and the determination of tax basis can be determined in accordance with the market ** at the time of the establishment of the property right transfer documents or the ** pricing or guide price implemented by the relevant national regulations. The current policy temporarily exempts individuals from stamp duty on the sale or purchase of housing.
5. Deed tax of the transferee. According to the Deed Tax Law of the People's Republic of China, the units and individuals who transfer the ownership of land and houses within the territory of the People's Republic of China are taxpayers of deed tax and shall pay deed tax in accordance with the provisions of this Law. The deed tax rate is 3%-5%. The people of all provinces, autonomous regions and municipalities directly under the Central Government may, according to the actual situation of the region, determine the differential tax rate for the transfer of housing ownership of different subjects and different types in accordance with the procedures. Article 6 of the Deed Tax Law stipulates that legal heirs who inherit the ownership of land and houses through inheritance are exempt from deed tax. The Notice of the State Administration of Taxation on Issues Concerning the Strengthening of the Tax Administration of Real Estate Donated by Individuals in Real Estate Transactions (GSF 2006 No. 144) stipulates that the deed tax shall be levied on the full amount of the donee for the act of donating immovable property by individuals without compensation, and the tax rate shall be 3%.
Article 1 of the announcement of the Ministry of Finance and the State Administration of Taxation on the convergence of preferential policies after the implementation of the Deed Tax Law (Announcement No. 29 [2021] of the Ministry of Finance and the State Administration of Taxation) stipulates that if the ownership of land and houses changes due to divorce and division of common property, the husband and wife shall be exempted from deed tax.
*: Zhonghui Wuhan Tax Agent Firm** Office.
Author: Ji Hongkui.
*Editor: Mu Lin Financial News.