Property tax may be introduced nationwide
2011-05-07 09:29
THE potential introduction of a property tax nationwide is one of the biggest new factors affecting China's real estate market, Deloitte said yesterday in its latest industry analysis.
Despite the implementation of a series of austerity measures, there is still no obvious sign of a price correction in residential properties and this probably will trigger further policy changes this year, according to Deloitte's China Real Estate Investment Handbook 2011 Edition.
"There has been mounting pressure for the government to control property prices," said Nancy Sun Marsh, capital providers sector leader at Deloitte China. "More tax changes, including the potential introduction of property tax in China on a nationwide basis, might be prompted as the government readjusts its housing policy."
An annual blue paper released on Thursday by the Chinese Academy of Social Sciences also suggested more tightening measures could be launched this year to combat soaring house prices after earlier attempts failed. The implementation of a property tax would be one of the toughest policies to be introduced by the central government, the paper said.
Property tax trials currently being held in Shanghai and Chongqing should be expanded to more cities across the country at an accelerated pace over the next few years, the blue paper said. By levying such a tax, local governments will be able to get a more sustainable source of fiscal income, thus cutting their heavy reliance on land sales, which has been widely blamed for skyrocketing home prices across the country over the past decade.
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