CHINA will lower transaction taxes for second-time homebuyers and some first-home buyers in many cities, in the latest effort to lift the country’s housing market and slowing economy.

    There has been a series of measures to encourage property purchases. Two weeks ago, minimum downpayments for first- and second-time homebuyers were reduced.

    The transaction tax on second homes smaller than 90 square meters will be cut to 1 percent from 3 percent, and such tax for homes of more than 90 square meters will be cut to 2 percent, the finance ministry said Friday.

    The tax on first homes larger than 144 square meters will be lowered to 1.5 percent from 3 percent, according to a statement on the ministry’s website.

    “It’s obvious that the government is encouraging households to buy second and bigger homes,” said Yan Yuejin, a property analyst at real estate services firm E-House China in Shanghai.

    With effect from Feb. 22, the ministry will also scrap business tax for purchases of homes of more than 144 square meters.

    The tax cuts on second home purchases and the scrapping of the business tax will not apply in certain big cities such as Beijing, Shanghai and Shenzhen that have imposed restrictions on buying to prevent bubbles.

    China’s housing market, which accounts for around 15 percent of the economy, began to stabilize last year, helped by a slew of government measures.

    In December, Chinese home prices rose 7.7 percent from a year earlier, although the recovery remains uneven across the country as smaller cities still faces huge inventories of unsold homes.(SD-Agencies)