[Direct answer]In the Beijing area, in second-hand housing transactions, the deed tax is paid by the buyer, and personal income tax is generally paid by the seller. However, the specific responsibility for paying these taxes can be agreed upon by the buyer and seller in the contract, and the agreement takes precedence over the statutory taxpayers. According to the relevant provisions of the "Deed Tax Law of the People's Republic of China", in the transfer of land and house ownership within the territory of the People's Republic of China, the transferee is the deed tax payer, so the buyer is the deed tax payer. According to the "Individual Income Tax Law of the People's Republic of China" and related provisions, the income obtained from the transfer of real estate by individuals shall be subject to personal income tax, and the taxpayer is the seller. However, in transaction practice, the parties often transfer the tax burden to one party through the contract, but this agreement only binds the contractual counterparties and does not change the statutory taxpayer's identity. It is recommended to clarify the tax provisions before signing the contract to avoid disputes during the transfer of ownership. For more details, please refer to the following link:Real estate sales and construction project services.

I. Problem Background and Typical Scenarios

The issue of who should bear the taxes for second-hand houses is one of the focuses of transaction negotiations. Typical scenarios include: real estate agents verbally promising that "each party pays their own taxes" or "the seller gets the full proceeds", but disputes arise over the large amount of taxes during the transfer; the buyer believes that the seller should pay the deed tax, while the seller thinks that the buyer should bear the personal income tax, and the contract is ambiguous; the seller hides the fact that the house has been held for more than five years and is the only housing, resulting in the buyer paying more taxes; and attempts to pay less taxes by underreporting the transaction price through "yin-yang contracts", which may lead to legal risks. Many people confuse the legal taxpayers with those who bear the tax obligations according to the contract, mistakenly believing that whoever pays the taxes is the obligated party. In fact, the legal identity is fixed, and the agreement only solves the internal burden-sharing. Relevant contractual arrangements can be combined withReal estate sales and construction project services.

II. Key points of contention

There are three key points of dispute regarding tax obligations. Firstly, the distinction between statutory and contractual obligations: The legal taxpayer for deed tax is the transferee (buyer), and the individual income tax is payable by the transferor (seller). However, the contract may stipulate that the other party shall actually bear the tax obligations, and such agreement shall not be binding on the tax authorities. Secondly, the determination of tax exemption conditions: Individuals transferring a self-used residence for more than five years and the only housing for family living are exempt from individual income tax. Whether the property meets the "five-year ownership and sole residence" criteria directly affects the tax burden, and the two parties often have disputes over the evidence in this regard. Thirdly, disputes over taxable value: Whether to use the online signing price, appraisal price, or fixed price as the taxable basis, and underreporting the transaction price may constitute tax evasion. In cases involving contract validity and performance, reference can be made to relevant legal provisions.Business and contract dispute services for enterprisesPrevent potential risks arising from contractual provisions.

III. Professional analysis by Hengluo Lawyers

Based on our practical observations in handling real estate transaction cases, the most common issues in tax disputes are "unclear contract provisions" and "inaccurate tax-exempt information". According to the Deed Tax Law and the Personal Income Tax Law and their implementing regulations, the legal taxpayers of deed tax are buyers, and the legal taxpayers of personal income tax on real estate transfer are sellers, which are rigid provisions. However, if the buyer and seller transfer the tax burden through clauses such as "net profit price" and "tax-inclusive price", these clauses are valid within the contract, but the tax authorities will still collect taxes from the legal taxpayers. In practice, some sellers conceal that the house is not a "fully owned and unique property", or the two parties sign a false contract to pay less taxes, which easily leads to risks of retroactive payment and fines in the future. Hengluo Lawyers usually suggest: listing the detailed responsibilities for taxes and fees in the contract and verifying the holding period and number of houses; refusing to sign false contracts; and clarifying the scope of the tax-inclusive clauses and dispute resolution. For complex transactions, follow-up services can be provided.Special services and other case-related services.

IV. Practical suggestions and legal basis

The legal basis includes Article 1 and Article 2 of the "Deed Tax Law of the People's Republic of China" (effective September 1, 2021) regarding the deed tax payers (the parties receiving the ownership of land and houses) and taxable acts; the provisions on the taxation of property transfer income and the transfer of personal property in the "Individual Income Tax Law of the People's Republic of China" (amended on August 31, 2018) and its implementing regulations; and the "Notice on Issues Concerning the Collection of Personal Income Tax on the Gains from the Sale of Housing by Individuals" and other clear rules on the "five-year and single-property" tax exemption. Practical suggestions: Clearly stipulate that the deed tax shall be borne by the buyer, and the personal income tax shall be borne by the seller as the statutory basis; specify in the contract the actual party who shall bear the tax and verify the conditions for tax exemption; declare the transaction price in accordance with the actual transaction, and avoid the use of false contracts; calculate the total tax burden before the transfer of ownership and incorporate it into the contract. In case of tax disputes, relevant provisions can be referred to for reference.Real estate sales and construction project services.

5. Henglu Law Firm's Advice

The question of "who should pay the taxes and fees" needs to be considered from two perspectives: the legal taxpayer's identity cannot be changed, with the deed tax being paid by the buyer and the personal income tax being paid by the seller; however, the two parties can agree on who will actually pay the money, and such an agreement is only binding on them. Three reminders: First, list the tax and fee provisions in the contract, clarifying the legal and agreed upon responsibilities to avoid disputes over the transfer of ownership; Second, verify whether the house meets the tax-free conditions such as being "fully owned for five years and being the seller's only property", to prevent the seller from concealing information and causing the buyer to pay more taxes; Third, declare taxes based on the actual price, avoiding the risks of sham contracts and tax evasion. If the agent or the other party makes vague promises, it is necessary to put them in writing. If you need to review the contract, you can seek help from a professional.Real estate sales and construction engineering servicesReduce transaction risks.

VI. Frequently Asked Questions

Q1: Who is legally required to pay the deed tax and personal income tax? Can the contractual provisions change this requirement?

The legal taxpayer status is fixed: according to the "Deed Tax Law", the party receiving the ownership of the house (the buyer) is the taxpayer for deed tax; according to the "Individual Income Tax Law", the party transferring the property (the seller) is the taxpayer for individual income tax. The contractual agreement cannot change this legal status, and the tax authorities will still collect taxes from the legal taxpayers. However, the buyer and seller can agree in the contract which party will actually bear the taxes (such as "the seller gets the net profit and the buyer pays the taxes"), and this agreement is valid within the contract, binding the parties on who will pay the money, rather than their obligations to the tax bureau. Therefore, the agreement solves the issue of "internal payment", but does not change the "legal taxpayer status". It is necessary to clearly distinguish between the two to avoid the misunderstanding that signing a tax-inclusive clause changes the taxpayer's obligations.

Q2: Who should pay the taxes and fees for second-hand housing transactions if there is a dispute, and what evidence do I need to prepare?

The core evidence includes: the sales contract for existing houses and the supplementary agreement (proving the agreement on tax payment responsibilities), the online signing contract and the transaction price certificate, the tax payment certificates or payment notices for deed tax and personal income tax, the proof of house ownership and holding period (such as the registration time of the property ownership certificate and the seller's declaration of the number of housing units owned by his family), the communication records and promises of the intermediary (such as the chat records of "each party pays their own taxes"), and the audio recordings or written letters of the parties' consultation on tax payment. The evidence should be organized around "statutory tax payment obligations + contractual agreement on responsibility + actual payment situation". The more complete the materials are, the clearer it will be whether the agreement is breached or the tax is legally shared. It is recommended to keep the written evidence of the tax payment clauses when signing the contract, and to let a lawyer assist in providing evidence in case of disputes.

Q3: How much does it cost to protect one's rights in disputes over tax fees for second-hand houses?

If a dispute arises solely due to a breach of the agreement on tax and fee obligations, labor arbitration is not applicable, and the case is generally resolved through civil litigation. The case acceptance fee shall be paid in accordance with the "Method for Payment of Litigation Costs", based on the amount of the litigation request (usually the amount of the disputed taxes). The losing party shall bear the fee. If the claimant demands to continue performing the contract and handle the transfer of ownership, the subject matter shall be calculated based on the value of the house, and the fee shall be correspondingly increased. The attorney's fee shall be determined based on the complexity of the case and the subject matter, and shall be governed by the entrustment contract. Regarding tax administrative penalties, they shall be determined by the tax authorities in accordance with the law. The taxpayer shall not be charged fees, but may be required to make up for the arrears and late payment penalties. It is recommended to first calculate the amount of the dispute and the cost of protecting rights. For small-amount disputes, it is preferable to first attempt negotiation or mediation.

Q4: How long does it usually take to resolve disputes over taxes and fees for second-hand houses?

If the dispute can be resolved through negotiation or mediation by an intermediary within a few days to weeks; if negotiation fails and a civil lawsuit is filed, the first-instance ordinary procedure will be concluded within six months and the summary procedure within three months. For small-amount disputes with clear facts, the summary procedure or small-claims litigation may be applicable, with a shorter timeframe; for appeals, the second-instance procedure generally takes three months. For disputes involving tax inspections or administrative penalties, the tax authorities will investigate in accordance with the Tax Collection and Administration Law and other regulations, and the time limit will depend on the circumstances of the case. Overall, pure contract tax disputes often take several months to half a year from litigation to adjudication. It is recommended to clarify the terms and retain evidence at the contract signing stage to reduce disputes and shorten the litigation period at the source.

Q5: There's a dispute over the transaction taxes for second-hand houses. What should I do specifically?

It is recommended to follow a four-step approach: 1. Check the tax provisions in the contract to clarify the legal taxpayers (the buyer for deed tax and the seller for personal income tax) and the actual parties who will bear the tax obligations, distinguishing the two different relationships. 2. Collect the contract, tax payment certificates, proof of the property's holding period, and communication records to formalize the agreed obligations and payment facts. 3. If the other party breaches the contract and refuses to fulfill its obligations as agreed, first send a letter to negotiate or request the intermediary to mediate. 4. If negotiations fail, initiate civil litigation within the statute of limitations to enforce the contract or claim compensation. At the same time, avoid using "yin-yang contracts" or underreporting taxes to avoid tax risks. When necessary, hire a lawyer to review the contract and represent you in litigation.Real estate sales and construction project servicesProtect rights and interests.

The above Q&A is mainly based on the judicial practice in Beijing. There may be differences in the adjudication standards in different regions. It is recommended to consult a professional lawyer based on the specific circumstances of the case.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →Legal services for real estate transactions·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and public adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.