China studying property tax expansion

Updated: 2012-11-12 21:46

BEIJING - The Chinese government is "actively studying" an expansion of the experimental property tax program in the country and may expand the program when time is appropriate, said Minister of Housing and Urban-Rural Development Jiang Weixin on Monday.

The government will not relax current restrictions on home purchases in the short term, Jiang told reporters on the sidelines of the 18th National Congress of the Communist Party of China, which opened on November 8.

Even though the recent rebound in house transaction volume did not pose a serious problem, the ministry is on high alert if both transaction volume and home prices increase substantially, Jiang said.

The minister's remarks came as signs of warming emerged in the country's property market after the central bank cut benchmark interest rates and banks' reserve requirement ratio earlier this year to buoy the slowing economy.

Housing sales rose 5.6 percent year-on-year to 4.63 trillion yuan ($735 billion) in the first 10 months of the year, accelerating by 2.9 percentage points from the January-September period, according to the National Bureau of Statistics.

The Chinese government has repeatedly reiterated its firm stance on property market control and vowed to keep in place tightening measures like prohibition of third-home purchases, higher down payment requirement and property tax trials.

However, there have been concerns over the impact of the cooling property sector on the broad economy, as property investment accounts for about 13 percent of China's gross domestic output and one-fifth of the country's fixed-asset investment.

Some local authorities have "fine-tuned" their property policies since the second half of 2011 by allowing home buyers to borrow more from public housing funds, reducing taxes and fees or subsidizing home purchases.

The central government is "always ready" to take counter-measures if some cities readjust the property control policies without authorization, said Jiang.