Reply of the State Administration of Taxation on the Issue of Collecting Individual Income Tax on the Purchase of Shops by Individuals under Conditional Preferential Price Agreements with Real Estate Development Enterprises

This document clarifies that when individuals purchase shops from real estate development enterprises at a discounted price under an agreement requiring the shop to be leased back to the enterprise for a specified period, the discounted portion of the purchase price should be treated as property rental income and subject to individual income tax under the category of 'income from property leasing'.