How capital gains tax works in China
China folds gains into ordinary income tax instead of running a separate capital gains tax. Individuals report gains as property-transfer income at a flat 20% on the net amount.
Selling a home costs 20% of price minus original cost and reasonable expenses. A family's only home held over five years is fully exempt, and local bureaus may deem about 1% of the price where costs cannot be proved.
Trading listed A-shares on the market has been effectively exempt since 1998, which is why individuals trade shares but pay 20% on private-equity, restricted-share and property disposals. Companies pay 25% on gains as enterprise income.
Tax rates at a glance
- Property-transfer gains
- 20%Net basis
- Sole-home exemption
- 5 years
- Listed-share trading
- 0%
- Unlisted-share sales
- 20%
- Non-resident sellers
- 10%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
InvestorsCrypto holdersTradersHigh earnersFamily offices
Watch out for
- The listed-share exemption covers market trading, not everything equity-shaped. Restricted shares, pre-IPO stakes and private transfers are taxed at 20%.
- Property cost records decide the bill. Without purchase invoices and tax receipts, deemed-cost rules can tax far more than the real economic gain.
- Gifts of property to non-relatives are taxed at 20% on assessed value, and the donee inherits the original cost for a later sale. Family gifts need proper registration to stay exempt.
- Offshore sellers of Chinese company stakes face 10% withholding, and land-rich-company clauses in treaties can keep taxing rights in China.
Frequently asked questions
Does China tax capital gains?
Yes, at 20% for individuals on property and private-share gains, and 25% for companies. But gains from trading listed shares on the market are effectively exempt.
Are property sales taxed in China?
Yes, at 20% on the net gain. A family's only home held over five years is exempt.
Are stock market gains taxed in China?
Individual market trading of listed shares is effectively exempt, though stamp duty on sale still applies. Off-market and restricted-share disposals pay 20%.