China announced on Wednesday it will extend a tax incentive aimed at supporting people in selling their old homes to buy new ones.

Homeowners who sell their existing property and purchase another within one year can apply for a refund of the personal income tax levied on the sale of the property, according to a notice issued by the Ministry of Finance, the State Taxation Administration and the Ministry of Housing and Urban-Rural Development.

The policy came into force on Jan 1 and will run until the end of next year. Properties sold and repurchased must be located within the same city.

If the purchase price of the new home equals or exceeds the sale price of the old home, the taxes already paid will be fully refunded. If lower, the refund will be calculated proportionally, with the specific amount determined based on the ratio of the new home price to the old home sale price.