City justifies new taxation policy

Updated: 2011-08-25 22:40

(Xinhua)

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NANJING - A recently-enacted tax on registering new ownership is in line with Chinese regulations, said an official with the Local Taxation Bureau of Nanjing, the capital of East China's Jiangsu province, Wednesday.

The controversial new judicial explanation of the Marriage Law, which took effect August 13, stipulated that property bought on mortgage by one party prior to marriage is to be deemed the personal property of the registered owner, not the couple's joint estate.

"If another name is added to the property ownership certificate, that means the property's ownership has changed," said Guo Zhihua, an official with the bureau.

"A tax should be levied for the transference of property," he said.

The new taxation policy came into effect Tuesday.

The taxation rate in Nanjing is 3 percent of the transferred property. Previously, the husband and the wife were each considered to own half of the property, meaning that the taxation would be 3 percent of half of the property's value.

Guo noted that in many cities, including Qingdao, Quanzhou, Suzhou, Wuxi, and Chengdu, a similar tax was levied. In Beijing, however, there is no such regulation at present.

The new judicial explanation caused a sensation among young couples in China. Many women tried to have themselves registered as co-owners on property in order to feel secure in their marriage and be entitled to at least half of their home in case of divorce.

As a result, some accused the Nanjing taxation bureau of "fishing in troubled waters."

"The harmony of traditional families will be disturbed by the new taxation policy," said a woman surnamed Wang who was receiving a consultation in a real estate trading center.

"Suppose the house costs 1 million yuan, the couple has to turn in 15,000 yuan for adding a name  (to the property ownership certificate) . It is no small amount and is likely to result in a dispute between the husband and the wife making the decision," she said.

A female staff member with the trading center said they received the notice for taxation on Tuesday, "but we haven't seen any document for operational instruction," she said.

"To date, the local taxation bureau hasn't received any applications for registering new ownership," said Guo Zhihua, a taxation bureau official.