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China's property tax trial expansion in doubt

Updated: 2013-01-14 13:39
( Xinhua)

BEIJING - China may not expand experimental property taxes to more cities in the near future because of inadequate planning and law making, local media reported on Monday.

The government is conducting "active research" on a plan to expand the property tax trials currently in place in Shanghai and Chongqing to other Chinese cities, but it has proved difficult to hammer out a scheme for doing so, the Economic Information Daily quoted a tax official as saying.

"Property taxes impact the national economy and people's livelihood and an expansion needs to be discussed more widely," Wang Kang, chief accountant of the State Administration of Taxation, was quoted as telling a forum on Saturday.

The trial imposition of taxes has been part of China's efforts to cool its property market since 2010 in response to public complaints over runaway housing prices.

Nationwide property tax collection is imperative in the long term but lacks the foundation of necessary legislative work at present, Nie Meisheng, president of the China Real Estate Chamber of Commerce, told the Economic Information Daily.

Present property taxes imposed in Shanghai and Chongqing have not played a significant role in keeping local housing prices in check, according to Gu Yunchang, deputy head of the China Real Estate and Housing Research Association.

For example, the Chongqing trial only covered high-end houses and was too limited in its scale, Zhang Dawei, marketing director of the Hong Kong-based real estate agent Centaline Group, told the paper.

China will accelerate work to expand property tax trials in 2013, Jiang Weixin, minister of housing and urban-rural development, vowed last month.

Apart from the taxes, the government has required higher down payments, restricted third-home purchases and built millions of affordable homes in an attempt to bring housing prices down.

But the property market has shown signs of warming in recent months, particularly after the central bank twice cut interest rates and the reserve requirement ratio for banks to buoy the economy last year.

In November, 53 out of a pool of 70 major cities recorded higher new home prices than a month earlier, up from 35 in October, according to data from the National Bureau of Statistics.

China will unswervingly stick to property market controls this year and ensure enough land supply for building commodity houses, Xu Shaoshi, minister of land and resources, told a conference last week.

 

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