[Legal Opinion]
China does not pay inheritance tax. However, individual income tax shall be paid. If the donee transfers the real estate after obtaining the free gift from the donor, the individual income tax shall be calculated and paid at the applicable tax rate of 20% based on the balance of the income from property transfer minus the taxes paid in the process of accepting the gift and transferring the housing and the relevant reasonable expenses when paying individual income tax. If the donated house is the only house of the seller's family, and the original purchase time exceeds 5 years, individual income tax will be exempted.
