China Extends Home Purchase Tax Cut to Bolster Property Market

China will extend a policy scrapping value-added tax on certain home sales in a move aimed at easing the country’s persistent property slump.

The exemption — which applies to individuals selling residential properties they have owned for at least two years — will be implemented from Friday, the country’s Ministry of Finance said in a statement Tuesday. A 3% VAT remains for homes sold within two years of purchase.

In cities including Shanghai, sellers of homes held for less than two years previously had to pay VAT of 5%.

The country’s major cities already implemented a VAT exemption in late ...