(Bloomberg) -- China’s central government offers a rare tax incentive for residential purchases, ramping up support for the country’s embattled real estate sector. 

Residents who buy new homes within one year after selling old homes will enjoy refunds for personal-income tax on the sale, according to a statement on the finance ministry website. The tax refunds will take effect from October till the end of 2023. 

The novel tax policy comes after a yearlong slump in the housing market. To spark a turnaround, the central government is allowing nearly two dozen cities to lower mortgage rates for purchases of primary residences, while the central bank vowed to speed up delayed homes with more special loans. 

“The measure may help restore some confidence,” said Xu Xiaole, a property analyst at Beike Research Institute. “It’s another demand-side policy targeting homebuyers after mortgage rate cuts.” 

The tax break suggests the central government is ramping up support for people seeking to upgrade their homes. Previously, most incentives focused on first-time buyers, echoing President Xi Jinping’s mantra that “houses are for living in, not for speculation.”

Unless the person has held on to home for at least five years, most big cities charge personal-income tax for selling properties with value increase, usually 1% of the full amount or 20% of the gain. 

Under the new policy, people who buy more expensive apartments will enjoy full refunds on such tax. The tax break only applies to home upgrading in the same city.  

Earlier on Friday, China’s financial regulators told the nation’s biggest state-owned banks to extend at least 600 billion yuan ($85 billion) of net financing to the embattled property sector in the final four months of this year, Bloomberg reported.

The call is the latest in a series of actions intended to arrest a property slump that’s been weighing on the world’s second-largest economy for more than a year. Chinese policymakers have already encouraged local governments to ease curbs on homebuying, asked lenders to meet the reasonable financing needs of developers, and set up a program to provide special loans through policy banks to ensure projects are delivered.

(Updates with more details and background from the fourth paragraph)

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