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Property tax to expand (2)

(Global Times)

08:32, December 09, 2011

However, Zhang Dawei, an analyst with Centaline Property, told the Global Times that property tax has had little effect in curbing housing prices, since it affects few people.

Echoing Zhang, Liu Weiwei, a researcher with the Shanghai-based E-house China R&D Institute, said the main function of property tax is to increase local financial revenues, especially with land income dropping so much recently.

Property tax only affects a few property speculators who want to make money by selling or renting out houses at a higher price. However, the tax has been transferred to buyers or renters, which will only prompt housing prices to go up, Liu told the Global Times.

To curb soaring housing prices, the government should help to increase the supply of ordinary commercial housing in the market, which is smaller and cheaper, since they account for less than 20 percent of the property market, said Liu.

Finance ministry officials have recently expressed an interest in summarizing the experience of the current pilot projects and further pushing forward the reform.

Experience in Chongqing and Shanghai will be summarized at the end of the year and expansion of the pilot projects will be discussed then, Jia said.

While it is not yet known which cities will be included in the next phase, the main direction of property regulation is to replace administrative means such as purchasing limitations with economic means like the property tax, said Jia.

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dyangu at 2011-12-14131.107.0.*
Good! All developed countries have property tax because it is a very fair tax on the rich. I wish China started this years ago. Then maybe prices today won"t be so high and investors won"t buy and leave it empty because it will cost them money every year.

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