· Document Number：No. 39 [2016] of the General Office of the State Council

· Area of Law： Foreign Economy and Trade

· Level of Authority： Regulatory Documents of the State Council

· Date issued：05-17-2016

· Effective Date：05-17-2016

· Issuing Authority： General Office of the State Council

· Status： Effective

Several Opinions of the General Office of the State Council on Accelerating the Cultivation and Development of the Home-Rental Market
(No. 39 [2016] of the General Office of the State Council)
The people's governments of all provinces, autonomous regions, and municipalities directly under the Central Government; all ministries and commissions of the State Council; and all institutions directly under the State Council:
Focusing on both home purchase and rental as well as the cultivation and development of home-rental market are an important part to deepen the reform of housing system, and an important route to achieve the objective of urban residents having houses to live in. Since the reform and opening up, the home-rental market in China has constantly developed, and played an important role in improving the housing conditions of urban residents and promoting the progress of new-type urbanization, but there are still outstanding problems, for instance, the market suppliers have not been fully grown, the market order has not been regulated, and the laws, regulations and systems have not been complete. With consent of the State Council, the following opinions are given for the purpose of accelerating the cultivation and development of the home-rental market:
I. General requirements
(1) Guiding thought. The spirit of the 18th National Congress of the Communist Party of China (”CPC”), the Third, Fourth, and Fifth Plenary Sessions of the 18th CPC Central Committee, the Central Urbanization Work Conference and the Central City Work Conference shall be comprehensively implemented, the decisions and arrangements of the State Council shall be conscientiously carried out, and, according to the overall layout for “economic, political, cultural, social, and ecological progress” and the strategic layout of “Four Comprehensives,” with the firm development and implementation of the development concept of innovation, coordination, green, openness and sharing, the establishment of a system focusing on both home purchase and rental shall be taken as the major direction, to improve the home rental system with the main market allocation and the basic guarantee provided by the government. The home-rental consumption shall be supported to promote the sound development of the home-rental market.
(2) Development targets. By 2020, a home-rental market system with diversified suppliers, regulated operation and services, and stable rental relationships shall be basically completed, a sustainable public rental housing security system guaranteeing the basic and promoting fairness shall be basically completed, and a home-rental laws and regulations system with clear market rules, strong government administration, and sufficient guarantee of rights and interests shall be completed, so as to promote the accomplishment of the objective of urban residents having houses to live in.
II. Cultivating market suppliers
(3) Developing home-rental enterprises The role of the market shall be fully underscored, enterprises shall be motivated, houses shall be raised through rental, purchase and other multiple channels, the size, intensification and specialization of home-rental enterprises shall be improved, the pattern featuring the coordinated development of small, medium and large home-rental enterprises shall be developed, so as to meet the constantly increasing demand for home rental. According to relevant provisions of the Guiding Opinions of the General Office of the State Council on Accelerating the Development of Life Service Industry and Promoting the Upgrade of Consumption Structure (No. 85 [2015] of the General Office of the State Council), home-rental enterprises are eligible for relevant supporting policies on the life service industry.
(4) Encouraging real estate development enterprises to provide home-rental services. The real estate development enterprises shall be supported in expanding businesses, and making use of constructed houses or newly constructed houses to provide rental services; real estate development enterprises shall be encouraged to rent out commercial housing in inventory; and real estate development enterprises shall be guided in cooperating with home-rental enterprises in the development of renting out real estate.
(5) Regulating home-rental intermediary agencies. The role of the intermediary agencies shall be fully underscored for them to provide regulated intermediary services. Efforts shall be made to improve the service quality of agencies, constantly improve professionals' quality, and promote the lawful operation, good faith and fair deal of intermediary agencies.
(6) Supporting and regulating home rental by individuals. The preferential policies encouraging individuals to rent out homes shall be implemented and individuals shall be encouraged to rent out their own homes in accordance with the law. The act of home rental by individuals shall be regulated, and individuals shall be supported in entrusting their homes to home-rental enterprises or intermediary agencies for rental.
III. Encouraging home-rental consumption
(7) Improving supporting polices on home rental. All regions shall make preferential policies and measures to support home-rental consumption, and guide urban residents in resolving housing issues through home rental. The policy on the payment of rental by withdrawing housing provident fund shall be implemented and formalities shall be simplified. Tenants without the local household registrations may apply for residence permit according to relevant provisions of the Interim Regulation on Residence Permits, and enjoy compulsory education, medical care and other basic public services as provided by the state.
(8) Defining the rights and obligations of all parties. The landlord shall perform obligations according to relevant laws, regulations and contract agreements, and ensure that the housing and interior facilities satisfy requirements. During the term of a house lease, the landlord shall not rescind the lease without good cause, raise the rental unilaterally, or deduct deposit without permission; the tenant shall use the house and interior facilities according to the contract agreements, and pay rental on time.
IV. Improving the public rental housing
(9) Advancing public housing subsidies. The way to provide public housing shall be changed and measures on housing and subsidies shall be implemented. The families eligible for public housing shall be encouraged to rent homes in market, and government shall provide eligible families with rental subsidies. The rental subsidy system shall be improved so as to reasonably determine rental subsidy standards based on the market rental level and the actual circumstances of the eligible families.
(10) Improving the ability to secure the operation of public housing. Local governments shall be encouraged to entrust the public housing invested in and managed by the government to specialized private enterprises for operation and management by purchasing services or the public private partnership (”PPP”), and constantly improve management and services. Migrant persons with stable jobs in cities, newly employed university graduates, young doctors, young teachers and other professional technical personnel, and any person satisfying the requirements for the access to the public housing for urban residents shall be included into the scope of the public housing security.
V. Supporting the construction of housing for rental
(11) Encouraging the construction of housing for rental All regions shall include the construction of housing for rental into housing development planning based on the housing supply and demand, and other factors, reasonably determine the quantity of housing for rental to be constructed, made arrangements in the annual housing construction plans and the housing land supply plans, guide the reasonable allocation of land, funds and other resources, and construct housing for rental in an orderly way.
(12) Allowing transformed properties for rental. Commercial properties, etc. shall be allowed to be transformed to housing for rental, the land use period and plot ratio shall remain unchanged, the purpose of land use shall be adjusted to housing, and after such adjustment, the prices of water, electricity and natural gas shall be subject to residential standards. Existing housing shall be allowed for rental after being transformed according to the state and local housing design specifications, and the transformation shall not alter existing firewall section, safe evacuation or fire separation facilities so as to ensure the intactness and validation of fire fighting facilities.
VI Strengthening policy support
(13) Offering tax incentives. Tax incentives and supporting policies shall be offered to home-rental enterprises, institutions and individuals registered for recordation in accordance with the law. Relevant polices on home rental in the pilot program of replacing business tax with value-added tax (”VAT”) shall be implemented. In the case of home rental by individual, VAT shall be calculated and paid at the tax rate of 5 percent minus 1.5 percent; if the monthly income from home rental by individual is no more than 30,000 yuan, the policy on the exemption from VAT shall be applied prior to the end of 2017; for real estate intermediary agencies provide home rental broke and commission services, the VAT rate of 6 percent shall apply; for immovable property obtained by general tax payers prior to the pilot program of replacing business tax with VAT, the application of simply tax computation way shall be allowed, i.e. VAT shall be levied at the tax rate of 5 percent. For proceeds from home rental by individuals, individual income tax shall be levied by half; in respect of the expense on the housing rental afforded by individuals, based on the reform of individual income tax, the issue as to the deduction of relevant expense shall be overall studied.
(14) Providing financial support. Financial institutions shall be encouraged to provide financial support to home-rental enterprises according to the principle of compliance with laws and regulations, controllable risks and business sustainability. Eligible home-rental enterprises shall be supported in issuing bonds and products of immovable property in the form of securities. The pilot program of real estate investment trusts (”REITs”) shall be steadily advanced.
(15) Improving the way to supply land. Local governments shall be encouraged to revitalize existing land in urban areas, and adopt multiple measures to increase the effective supply of land used for home rental. Where a newly constructed housing program is transferred by bidding, auction sale or listing, the transfer plan and contract shall specify and provide the years for holding and rental.
VII. Strengthening the supervision and administration of home rental
(16) Completing rules and systems. The laws and regulations on home rental shall be completed so as to define the rights and obligations of the parties, regulate market acts, and stabilize lease relationship. Exemplary house lease text and online conclusion of contract shall be promoted, and the house lease registration and recordation system shall be implemented.
(17) Implementing the responsibilities of local governments. The provincial-level people's governments shall strengthen the administration of home-rental market within their respective regions, strengthen work guidance, and research and solve key and difficult issues. The municipal people's governments shall take the general charge of the administration of the home-rental market within their respective administrative regions, establish a regulatory system with the cooperation of multiple departments, define powers, duties and division of work, make full use of the role of street, township and other grassroots organizations, and promote the grid administration of home rental. The construction of home rental information service and regulatory platform shall be accelerated to promote the information sharing between departments.
(18) Strengthening sector administration. The housing and urban-rural development departments shall be responsible for the administration of home-rental market and relevant coordination, strengthen the administration of home-rental market together with relevant departments, improve the credit administration system of home rental enterprises, intermediary agencies and professionals, and comprehensively establish relevant market participant credit records which shall be incorporated into the national credit information sharing platform so as to impose joint punishment on participants with serious loss of credit. The public security department shall strengthen the public security administration as to home rental and the residence registration of the parties in home rental, urge and guide neighborhood committees, villagers committees, property service enterprises and other administration entities in screening for hidden risks in safety. All departments concerned shall, according to their powers, duties and division of work, investigate and deal with in accordance with the law the engagement in illegal businesses by making use of home rental.
All regions and all departments concerned shall fully recognize the significance in accelerating the cultivation and development of home-rental market, strengthen organization and leadership, improve the working mechanism, effectively conduct publicity and guidance, and create a good environment. All regions shall, based on these Opinions, research and make specific measures for implementation, implement job responsibilities, and ensure the orderly advancement of all jobs. The Ministry of Housing and Urban-Rural Development shall urge and examine the implementation of these Opinions together with departments concerned.
General office of the State Council
May 17, 2016