How to tax a garage sale
In recent years, with the active real estate market, transactions of garages as accessory properties have become increasingly frequent. Many owners do not understand the relevant tax policies when selling their garages, which may lead to subsequent tax problems. This article will provide a detailed analysis of the taxes, calculation methods and precautions involved in garage sales to help you complete the transaction in compliance.
1. Taxes and tax rates involved in garage sales
Garage sales mainly involve the following taxes. The specific tax rates and calculation methods are as shown in the table below:
| tax type | Tax calculation basis | tax rate | Remarks |
|---|---|---|---|
| value added tax | The difference between the sales price and the original value | 5% (simple tax calculation) or 9% (general tax calculation) | Individuals selling non-residential garages are required to pay |
| personal income tax | The balance after deducting the original value and reasonable expenses from the sales price | 20% | If the original value certificate cannot be provided, the approved tax rate will be 1%-3%. |
| land value added tax | Appreciation amount (sale price - deducted item amount) | 30%-60% progressive tax rate | In some areas, individuals selling non-residential buildings are temporarily exempted from the tax |
| stamp duty | Contract amount | 0.05% | Buyer and seller each bear half |
2. Garage sale tax calculation example
Assume that an owner sells a garage with a purchase price of 300,000 yuan for 500,000 yuan (held for 2 years). The relevant expenses are as follows:
| Project | Amount (10,000 yuan) |
|---|---|
| sale price | 50 |
| original value | 30 |
| VAT (5%) | (50-30)×5%=1 |
| Personal income tax (20%) | (50-30-1)×20%=3.8 |
| Stamp duty (0.05%) | 50×0.05%=0.025 |
| Total taxes | 4.825 |
3. Key matters needing attention
1.Distinguishing the nature of property rights:The tax policies for residential attached garages and independent property garages may be different, and the property type needs to be confirmed in advance.
2.Impact of holding period:Some taxes (such as value-added tax) have exemption policies for transactions held for 2 or 5 years.
3.Local policy differences:For example, Shanghai temporarily exempts personal non-residential land value-added tax from collection, while Shenzhen levies it at an approved tax rate of 5%.
4.Invoice saving:Original house purchase invoices, decoration cost vouchers, etc. can be used as a basis for reasonable deductions to reduce taxable income.
4. Legal ways to optimize tax costs
1. Reasonably share the total price: If the garage and the residence are sold in a bundle, the prices can be stated separately in the contract, and tax incentives may apply to the residential part.
2. Choose to hold for 5 years before selling: Some cities have a reduction or exemption policy for non-residential value-added tax for 5 years.
3. Taking advantage of tax depression: Some development zones have financial return policies for asset transactions, which can be achieved through compliant transfer of property rights.
5. Latest policy developments (hot spots in the past 10 days)
1.The fourth phase of Golden Tax supervision will be strengthened:Taxation departments in many places use big data to compare the differences between garage transaction prices and assessed prices, and initiate assessment and collection of transactions that are obviously low.
2.Promotion of unified real estate registration:The Ministry of Natural Resources requires that the national garage property rights data network be completed by the end of 2024, and tax supervision on cross-regional transactions will be stricter in the future.
3.Tax reduction and exemption pilot:Cities such as Chengdu and Hangzhou have recently introduced policies to reduce or exempt land value-added tax on the transaction of supporting garages in old communities to encourage the revitalization of existing assets.
Summary: The taxes and fees involved in garage sales are complex and large in amount. It is recommended to consult a tax professional before the transaction and make plans based on the latest policies and local rules to avoid tax issues affecting the transaction process or causing subsequent risks.
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