China's new value-added tax is already having an impact on the property market. That's by helping the sellers of apartments save money, especially those selling second-hand residences. Tuesday was the first work day since the new VAT rules took effect, and the chief of the state tax administration says he expected a rush to issue new VAT receipts. But the situation in Shanghai didn't turn out to be too hectic.

The new rules are fairly complicated, but in theory they do help sellers reduce their tax burden. In the past, sellers of homes which they had owned for more than two years had to pay business tax on the full sale price of the apartment. Under the new VAT rules, however, they won't pay any tax at all. For apartments that have been held for less than 2 years, the tax base for VAT is less than the old business tax, while the tax rates remained the same 5%.

Things here weren't as crowded as expected, however. The tax bureau chief said last month that one of the primary difficulties in implementation of the new VAT rules would be dealing with a huge number of requests for the new VAT receipts. He had thought many people would want to delay their transactions until after the new policy came into effect so as to save some money, but many here seemed to be in no hurry.

"No, I didn't come here today specifically because of the new policy. It did save me around 5,000 yuan, though," said a house buyer.

One reason for the lack of excitement might be that the reform has just started and hasn't gotten enough attention yet. But we did some math: For a pre-owned home selling for 5 million yuan and with an original cost of 3 million, the new tax deal will only save the seller at the most 12,000 yuan in tax, and perhaps as little as five thousand, depending on how long the home had been owned. Still, one industry analyst believes that the VAT reform will boost the sales of pre-owned housing in the long run.

"Whether there will be a peak work load will depend on the transaction volume in the market. I think there will be a rise in home transactions after the labor day holiday, so that will make things busier with the tax offices as well," said Yan Yuejin, senior researcher from E-House China Research.

Local real estate transaction offices say they will help sellers re-calculate their tax under the new VAT rules if they have not already paid their sales tax under the old rules.