The Ministry of Finance and the State Administration recently issued the "Notice Regarding the Individual Income Tax Issues Concerning Individuals Receiving Gifts of Houses Without Charge" (CaiShui [2009] No. 78). It clarifies that, apart from three scenarios where no individual income tax is levied on both parties in a gift of house ownership, other recipients who obtain gifted houses without charge will be subject to individual income tax on their gifted income at a rate of 20%.
The tax authorities stated that individuals receiving gifts...