Local govts' subsidies for property purchases serve their own interests

THE LOCAL GOVERNMENT OF YU'AN DISTRICT in the city of Lu'an in East China's Anhui province recently posted on its official website information about the house purchase subsidies it had provided, which shows that a person purchased 44 apartments in one single community, accessing subsidies of about 800,000 yuan ($115,456) in all. It is time to reconsider the policies of many local governments to subsidize property purchases, says Beijing News:

A staff member from the real estate market regulatory office responded that the subsidies provided to the person were all legal, because the policy of the local government did not set any ceiling on the number of apartments a person could buy. They just "never expected that one would buy so many".

That exposes a major loophole in the policy of subsidizing people who buy properties, which is quite popular among local governments. As the property markets outside the big cities are stagnant, many local governments have resorted to offering buyers subsidies in order to revitalize their local real estate markets. Yet the case in Lu'an shows how unfair these policies can be.