Think twice about imposing property tax

Huang Qifan, vice-chairman of the economic and finance committee of the National People's Congress, the country's top legislature, said at a recent forum that the imposition of residential property tax is imperative, listing four major advantages of the move. Before that, in November 2013, the Third Plenum of the 18th Communist Party of China Central Committee had said legislation on real estate tax will be accelerated, and the tax reform will be promoted in time.

Internationally, house property tax refers to levying tax on all houses based on value appraisals. Only when a residential property tax is imposed on all houses can such a move be considered fair, and benefit the local governments and the grassroots taxation system. Global experiences show the local governments of a country that levy a residential property tax also enjoy sufficient transfer of payment from higher levels of governments or the central government.

But in China, such transfers of payments are limited, which means income from house property tax will not be enough to meet the local governments' expenditure.