Expanded property tax trials predicted

Xinhua, October 21, 2013

China is likely to expand its property tax trials amid recent hikes in home prices in many cities, the Beijing-based Securities Daily reported on Sunday.

"The expectations for upgrading the real estate market control are increasing and a long-term mechanism will be gradually rolled out," said the report, which pointed to the expansion of property tax trials as one of the most likely approaches for the government to adopt.

Government documents concerning reform have repeatedly touched upon the subject, further evidence that this approach is locked in, said Jia Kang, head of the fiscal science research institute under the Ministry of Finance.

"The expansion of property tax trials is an inexorable trend. It will not only be extended to more cities, it will also be different from the current trials in Shanghai and Chongqing," said Hu Jinghui, vice president of bacic5i5j.com, a leading real estate intermediary service company in China.

Hu predicted expansion of the trials will also include existing homes, saying, "The levying of property tax on owners of multiple existing homes is very likely."

He said that the property tax trials implemented in Shanghai and Chongqing currently only target new homes based on per capita living space. Only the excessive living space of an apartment is subject to a property tax of 0.6 percent, which Hu said was a low tax level that failed to deter speculation.

According to experts, no actual progress has been made since the trials started in the two cities in 2011. Jia said that some property developers and government officials who own multiple homes might be the hurdle to the tax's expansion.

The National Bureau of Statistics (NBS) is scheduled to release home price data for September on Oct 22. NBS spokesman Sheng Laiyun said on Friday that the nation's property market has grown more complicated as major cities are seeing their housing prices soar again.