BEIJING - Chinese authorities on Wednesday announced the extension of a preferential individual income tax policy to support residents replacing their homes.

The policy will take effect from Jan 1, 2026 and conclude on Dec 31, 2027, according to a joint announcement issued by the Ministry of Finance, the State Taxation Administration and the Ministry of Housing and Urban-Rural Development.

Under the arrangement, taxpayers who sell their self-owned homes and purchase another home within one year will be eligible for a refund of the individual income tax already paid on the sale.

A full refund will be granted if the purchase price of the new home is equal to or higher than the selling price of the original home. If the new home is purchased at a lower price, the tax refund will be issued on a proportional basis.

To qualify for the preferential policy, both the sale and the purchase of the homes must take place within the same city. Additionally, the taxpayer who sells the self-owned home must be the owner or one of the co-owners of the newly purchased home.