TO help China's rank-and-file home buyers, the transaction tax is being cut in half for buyers of non-luxury homes for use as sole residences.

The tax cut was announced in a circular jointly issued yesterday by finance, taxation and housing ministries.

The circular approved by the State Council, China's Cabinet, also reduces the rate to 1 percent for units of 90 square meters or smaller.

The current transaction tax rate nationwide is between 3 and 5 percent depending on policies of local governments.