Since the end of September, the central bank and other financial regulatory authorities, the National Development and Reform Commission, and the Ministry of Finance have held consecutive press conferences to introduce specific measures of the "package" of incremental policies. The Ministry of Finance mentioned a number of policy measures to support the real estate market this time. In the fourth quarter, the "package" of supporting policies for the real estate market is expected to be accelerated, which may focus on implementing existing policies and accelerating the introduction of incremental policies. The policy of state-owned enterprises collecting unsold commercial housing that has been built will be further optimized and adjusted to unblock the collection points; increase the loan allocation of the "white list"; core cities continue to optimize restrictive policies, and policies such as reducing transaction fees and transaction commissions are also expected. As various policies continue to be implemented throughout the year, the improvement of the real estate market is also worth looking forward to.

On October 12, the State Council Information Office held a press conference, where the Ministry of Finance introduced the situation related to "increasing the counter-cyclical adjustment of fiscal policy and promoting high-quality economic development" and answered questions from reporters. The Ministry of Finance pointed out this time that "a package of targeted incremental policy measures will be introduced in the near future," clarifying four major aspects, and the policy for the real estate market is one of them, which also reflects the importance of the real estate market.

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In terms of real estate policy, the Ministry of Finance pointed out this time that it will "superimpose the use of local government special bonds, special funds, tax policies and other tools to support and promote the real estate market to stop falling and stabilize," and "will adhere to strict control of incremental, optimization of stock, and improvement of quality, actively study and introduce policies and measures that are conducive to the stable development of the real estate market." It also clarified the direction of future fiscal policy efforts from three aspects.

First, special bonds are allowed to be used for land reserve. Mainly considering that there are relatively more idle undeveloped land in various places at present, the local government is supported to use special bonds to repurchase idle stock land that meets the conditions. If necessary, it can also be used for new land reserve projects.

Previously, the Ministry of Natural Resources has issued a document to clarify that for the land requisitioned and purchased for affordable housing, it can be supported by funds such as local government special bonds. The central bank also stated that it would further clarify the research on the policy of supporting the capital of enterprises that meet the conditions to marketize the purchase of real estate land, and provide re-lending support when necessary. This time, the Ministry of Finance further clarified that special bonds can be used for land reserve, supporting local governments to use special bonds for the repurchase of stock land, which helps to accelerate the pace of requisitioning and purchasing idle stock land, promote market "inventory reduction," and promote the balance of supply and demand in the real estate market.

Overall, the supporting funds for revitalizing idle stock land are expected to accelerate the follow-up implementation, supporting real estate companies to reasonably return land and exchange land, which will have a substantial benefit for local governments and real estate companies.

Second, support the acquisition of stock houses and optimize the supply of affordable housing. First, use special bonds to purchase stock commercial housing as affordable housing in various places. Second, continue to use the affordable housing project subsidy funds to support localities to raise affordable housing sources by digesting stock houses.

The source of funds for purchasing stock commercial housing for affordable housing was previously more the central bank's 300 billion yuan affordable housing re-lending for unsold commercial housing that has been built. This time, the Ministry of Finance clarified that local government special bonds can be used to purchase stock commercial housing, and also pointed out that the affordable housing project subsidy funds will also focus more on supporting the digestion of stock houses. With more funds entering the market, it is expected to increase the digestion of built and unsold stock commercial housing, further promoting the balance of supply and demand in the real estate market, and may have a positive effect on stabilizing market expectations.

Third, promptly optimize and improve relevant tax policies. Currently, efforts are being made to study and clarify the value-added tax and land value-added tax policies that are connected with the cancellation of ordinary residential and non-ordinary residential standards. Next, further research will be conducted to increase support, adjust and optimize relevant tax policies, and promote the stable and healthy development of the real estate market.

At present, various places are accelerating the implementation of policies related to the cancellation of ordinary residential standards. The difference in taxes between ordinary and non-ordinary residential standards is mainly reflected in two aspects. On the one hand, canceling the ordinary residential standard helps to reduce the value-added tax for residents to purchase non-ordinary residential houses. After canceling the ordinary residential standard, the details of the housing purchase value-added tax rate and exemption years still need to be clarified. In this process, it is also necessary for various departments to coordinate and follow up.On the other hand, the land value-added tax levied on developers, according to the "Interim Regulations of the People's Republic of China on Land Value-Added Tax," exempts the land value-added tax if the taxpayer constructs ordinary residential buildings for sale and the value-added amount does not exceed 20% of the deductible project amount. If the enterprise develops and constructs non-ordinary residential buildings, the land value-added tax must be calculated and levied according to the full amount of its value-added. After the cancellation of the ordinary residential standard, the relevant policies of land value-added tax also need to be refined and adjusted.

Overall, there is still room for optimization in future tax policies to support the real estate sector. It is expected that there is some room for optimizing the deed tax policy, increasing the mortgage interest deduction from personal income tax, and reducing the pre-levy and pre-payment tax rates for corporate real estate-related taxes. This would further reduce the cost of residents' home purchases and the tax burden on real estate companies, stabilizing market expectations.

The Central Political Bureau meeting on September 26 set the tone for "promoting the stabilization and recovery of the real estate market," releasing the strongest "stabilize real estate" signal to date. Subsequently, at the end of September, first-tier cities introduced new real estate policies one after another, which greatly boosted market confidence and led to a significant increase in real estate sales during the National Day holiday.