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Posts: 35

Governor

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Q: Law on rent tax

My landlady is trying to dodge her duty to pay rental tax and wants to pass it on to me. We are having a discussion about this on WeChat and despite the fact that I am telling her that what she is trying to do is illegal, she's keeps on repeating the same diatribe.

 

My Chinese is basic and not good enough to go through legal pieces in Chinese, and would appreciate some help. Has anyone come across an extract in Chinese and its equivalent in English mentioning this law?

8 years 5 weeks ago in  Housing - China

 
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Emperor

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All rental income is supposed to be taxed. In GZ it's 6% from memory. It's supposed to be paid by the owner but they always bang it onto the tenant. Most people don't register their properties as being rented. 

 

In GZ they started to wise up to this but up to now have only found a way to get it paid when foreigners rent places. When we get our temporary registration form we now have to show that the apartment is registered officially at the tax office. Otherwise no registration. So a lot of landlords now won't rent to foreigners & will only sign a rent contract if the tenant Pat's the tax. Not much way of getting round it. 

 

The he same was happening with the 20% property tax if you bought somewhere and sold it within the first 5 years. That was being passed onto the buyer to pay. Your choice - pay it or the sale fell through. With the slowdown in housing sales this one might stop as the buyer will eventually have the upper hand. 

Sinobear:

Hotwater's post is very good.

When I lived in BJ, I negotiated the tax and heating fees as part of the monthly rent.

In GZ, I had two different landlords try to pull the tax as my responsibility at the end of the lease.

 

The onus really is on the prospective tenant to clarify (in writing) EVERYTHING prior to signing a lease REGARDLESS of what the landlord or agent tells you.

8 years 5 weeks ago
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8 years 5 weeks ago
 
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Posts: 5732

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i have never heard of a rent tax in china, a couple of cities are instigating property taxes annually, the government would have no idea who is in a rental unit at any given time or if it is even occupied, so the burden would definitely fall on the landlord, if they fail to put in a clause in the lease agreement for tax increases automatically added to the rent, it is the landlords problem.

 

i predict property taxes will be nationwide within 5 years. the dirty secret is local governments get about 30 percent of their revenue from closing and paperwork fees from the sell of homes, since home buying has peaked and money is shrinking, they have to make up the difference somehow or layoff teachers and government workers.

there are some countries that charge a sales tax on rent to be collected by the landlord, but most countries would have a tax on "rental income", rental income tax is the landlord's problem they got the rental income from you, its their problem.

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8 years 5 weeks ago
 
Posts: 3868

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All rental income is supposed to be taxed. In GZ it's 6% from memory. It's supposed to be paid by the owner but they always bang it onto the tenant. Most people don't register their properties as being rented. 

 

In GZ they started to wise up to this but up to now have only found a way to get it paid when foreigners rent places. When we get our temporary registration form we now have to show that the apartment is registered officially at the tax office. Otherwise no registration. So a lot of landlords now won't rent to foreigners & will only sign a rent contract if the tenant Pat's the tax. Not much way of getting round it. 

 

The he same was happening with the 20% property tax if you bought somewhere and sold it within the first 5 years. That was being passed onto the buyer to pay. Your choice - pay it or the sale fell through. With the slowdown in housing sales this one might stop as the buyer will eventually have the upper hand. 

Sinobear:

Hotwater's post is very good.

When I lived in BJ, I negotiated the tax and heating fees as part of the monthly rent.

In GZ, I had two different landlords try to pull the tax as my responsibility at the end of the lease.

 

The onus really is on the prospective tenant to clarify (in writing) EVERYTHING prior to signing a lease REGARDLESS of what the landlord or agent tells you.

8 years 5 weeks ago
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8 years 5 weeks ago
 
Posts: 2310

Shifu

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Here in Shanghai, the bureau where my wife is registering herself to living, insit that the landlord pay the tax, if he is renting the house. I have been told, that when she is renting to foreigner, no need to pay the tax, but when rent to chinese who want to register as living there, so she must . If my wife not register there, so she can not stay legaly in shanghai. it's BS for me, but TIC. If only I am registered on the address, landlord don't need to pay the tax. As I am told here.

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8 years 5 weeks ago
 
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Shifu

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it is very easy:

Yes the landlord must pay tax, but no one checks or cares, so 99% dont pay.

 

If you need an invoice, he has to pay or he cannot give you an invoice.

The landlord will raise just your rent in case you want an invoice. If you signed a contract already and then you want an invoice: have fun with the money discusions

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8 years 5 weeks ago
 
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Tell her to ring the tax department. Or, better yet, tell her you will pass her number onto the tax department so they can tell her the relevant laws.

 

In either case, it is the responsibility of the landlord to pay tax on THEIR rental income (ie, it's not a tax on renting - it's a tax on monies earned).

 

Q: does this landlord expect you to go to the tax office to pay? Or are they expecting you to just fork over the money to them? One is an obvious scam.

Hotwater:

In our case we have to physically go to the tax office to pay....we normally do it every 3 or 4 months. We had to physically go to the tax office with the landlords to register in the first place. An offical renttal contract was signed at the time (this did state a slightly lower rent than we were actually paying but wasn't too much lower as the tax office people aren't stupid....they have a good idea of market rents.

8 years 5 weeks ago
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iron-man:

She is supposed to accompany me to the police station to show them proof of ownership and identification. She knows I am unable to register otherwise and said that she doesn't want to pay the tax.

8 years 4 weeks ago
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8 years 5 weeks ago
 
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