Shanghai leads the way with property tax trial

10:21, January 28, 2011      

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A PROPERTY tax will be imposed on residential properties purchased from today by local families who already have one or more homes, the Shanghai government announced last night.

The tax, at a rate of either 0.6 percent or 0.4 percent depending on the price of the house, will also apply to newly purchased homes by non-local families, according to a statement on the official website of the city's information office.

Both new and existing properties will be covered.

There will be a living space allowance before tax applies. All properties owned by a family will be used to calculate living space.

A family would include husband and wife and children younger than 18, the statement said. Anything above 60 square meters per person will be taxed.

But adding up the total housing space a family owns will be triggered only in instances where a property is purchased starting today. That means that a family already owning two or more apartments will not pay tax, but if they buy an additional apartment now, all their properties will be considered taxable.

For taxable properties, a preferential rate of 0.4 percent will be adopted if the per-square-meter price of the property is not more than twice the average sale price of new homes registered in the city for the year before. The yearly average price for new homes, excluding those built under the city's affordable housing program, will be released every year by the local statistics bureau.

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