Will The Transaction Tax On Second-hand Housing Affect The New Housing Area Planning

Real estate is closely related to the vital interests of the people,and the relevant taxes are widely concerned.Existing literature on second-hand housing transaction tax is mostly based on the perspective of housing price and transaction volume.At present,limited scholarly research has been devoted to exploring the effects of taxes on both the size of consumers’ home purchases and the design of developers’ housing areas.Thus,further investigation into these areas could be a valuable research avenue.The distinction in tax treatment between normal and non-normal residential properties arises during the process of second-hand housing transactions.Individuals who purchase normal residential properties and meet the holding period requirements are exempt from paying business tax(value-added tax)when they sell the property.For individuals who purchase nonnormal residential properties and meet the holding period requirements,business tax(valueadded tax)is levied on the difference between the sales revenue and the purchase price of the property.This policy means that there is a significant tax burden difference between normal and non-normal residential properties in second-hand housing transactions that meet the holding period requirements.In Shenzhen,residential properties with a construction area larger than 144 square meters are considered non-normal residential properties,while residential properties with a construction area of 144 square meters or less can be considered normal residential properties if they meet the price and plot ratio standards.In second-hand housing transactions,the tax burden is usually borne by the buyer.In this context,this article aims to investigate whether consumers will reduce their purchases of nonnormal residential properties with a construction area greater than 144 square meters when there is a tax burden difference between normal and non-normal residential properties.Will developers change their plans for the construction area of new homes based on consumer preferences for home purchase area?To explore these issues,this article first uses the second-hand housing transaction records on Shenzhen Lianjia’s website and applies the Bunching method to find that consumers have reduced their purchases of houses with a slightly larger area than 144 square meters after the policy was implemented.Secondly,by using information on the approval time for construction project planning permits and housing area in the real estate project database on Shenzhen’s real estate information platform,the article conducts an empirical analysis of developers’ housing area planning behavior.The article finds that the introduction of standard housing specifications will reduce the number of planned houses with an area slightly larger than 144 square meters,and increase the number of planned houses with an area slightly smaller than or equal to 144 square meters.Moreover,the policy effect will be influenced by changes in tax rates.After the tax rate increases,the clustering on the left side of the area breakpoint will increase further from its original base.Finally,this article analyzes the heterogeneity of housing prices in the new housing planning process.In conclusion,after the tax burden difference between normal and non-normal housing is imposed,consumers’ preferences for the size of their purchases will change,and developers’housing area planning and design will also change.Based on this,the article suggests that if the policy objective is to alleviate the pressure on consumers in purchasing houses,the government can adopt transactional tax incentives to encourage the development of small-sized housing,thus achieving the goal of reducing housing prices.