How it is calculated
Cash at move-in = monthly rent × (deposit months + advance months) + agent fee + first month's fees First-year cost = monthly rent × 12 + fees × 12 + agent fee (deposit excluded, as it is refunded) Tax saved = tax(taxable income) − tax(taxable income − monthly deduction × 12)
Housing rent deduction
| Work city | Monthly deduction (yuan) | Annual deduction (yuan) |
|---|---|---|
| Municipalities, provincial capitals, specially designated cities and others set by the State Council | 1,500 | 18,000 |
| Other cities: registered urban-district population over 1 million | 1,100 | 13,200 |
| Other cities: 1 million or fewer | 800 | 9,600 |
Beijing, Shanghai, Guangzhou and Shenzhen are all in the 1,500-yuan tier. The 2023 increase (childcare, children's education, supporting parents) did not include housing rent.
Example
- Assumptions: Rent 6,000 yuan a month, ya yi fu san, agent fee of one month (100%), fees and internet 300 yuan a month, 100,000 yuan annual taxable income before the deduction, 1,500-yuan tier
- At move-in: Deposit 6,000 + advance rent 18,000 + agent fee 6,000 + fees 300 = 30,300 yuan
- First year: 72,000 + 3,600 + 6,000 = 81,600 yuan (6,800 yuan a month on average)
- Tax: 18,000-yuan deduction × 10% marginal rate = 1,800 yuan less tax a year
Things to keep in mind
- The rent deduction applies only if neither you nor your spouse owns a home in your main work city, and it cannot be claimed in the same year as the mortgage interest deduction (1,000 yuan a month).
- If a married couple works in the same city, only one of them can claim it.
- You can withdraw from the housing provident fund to pay rent (租房提取). Limits and documents differ by city; check with the fund center.
- Deposit and advance terms and agent fees are market practice, not legal standards. Check the deposit refund terms and early-termination penalties before signing.
FAQ
What does "ya yi fu san" mean?
You pay one month's rent as a deposit (ya yi) and rent three months in advance at a time (fu san). At move-in that is four months' rent plus any agent fee.
Do I need a rental contract?
When claiming the deduction you enter the landlord, address and term in the app, and you must be able to show the contract if the tax authority asks. Keep the documents for five years.
What if my rent is lower than the deduction?
The deduction is a fixed amount by city tier and does not depend on the actual rent, but you must actually be renting.