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Shanghai to levy property ownership tax on homes

By Yu Hongyan (chinadaily.com.cn)
Updated: 2010-05-12 12:05

Shanghai will reveal the details of its tightening real estate policies as early as the end of this month, including its long-debated property-ownership tax on multiple homes, Shanghai Securities News reported today.

The property ownership tax is a tax on property based on its ownership and is usually charged yearly based on the estimated value or rental income of the property. In China, the tax currently targets only commercial properties.

In the draft plan, Shanghai will say that multiple residential properties owned by one household will be regarded as commercial properties, and thus subject to property ownership tax, the paper reported.

A homeowner will pay the tax based on his or her family's area per capita. Each year, an eligible taxpayer will pay 0.8 percent of the estimated value of his housing, instead of the transaction price.

The spokesman for the city's housing authority did not rule out the possibility of the property ownership tax, saying that the tax should be decided at the State level and a decision by the central government should be carried out by all regions.

Another tax under heated discussion is the property tax, which is supposed to include a tax on land use in addition to the property ownership tax. There is currently no such tax in China.