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Property tax cools high-end housing market in Chongqing, making more houses affordable

(Xinhua)

08:49, January 30, 2012

CHONGQING, Jan. 29 (Xinhua) -- On 28 January last year, southwestern Chongqing municipality launched a long-await trial property tax to cool the red-hot housing market and curb the skyrocketing housing prices. One year after the implementation of the trial tax, the effect is obvious.

Chongqing and Shanghai are the first two cities in China to implement the trial tax .

"Fewer people have come to our sales office since the second half of last year, and everyone has asked if the houses we sell will be taxed or not," said a property consultant, surnamed Lin, whose office is located in Chongqing's Longtousi Park around which high-end apartment blocks are clustered.

"The gloomy housing market is getting even worse, and we cannot sell 10 houses a month. If the situation deteriorates further, I'm afraid that my colleagues and I will lose our jobs," said Lin.

According to research conducted by Chongqing Municipal Land Resources and Housing Administrative Bureau, the number of people who visited sales offices in high-end housing areas has recently dropped 30 percent to 50 percent, and considerable number of homebuyers changed their minds to buy smaller-sized or more modestly-styled homes.

Statistics show that from Jan. 28 to Nov. 30, the sale of high-end housing in Chongqing plunged to 700,000 square meters, 4.1 percent lower than that of 2010.

"The implementation of the tax restricted the development of the high-level housing market, and then curbed the prices of this kind of housing," said Wen Xing, an official of Chongqing Municipal Land Resources and Housing Administrative Bureau.

The property tax also rationalized the structure of the commercial housing, cutting the rate of large-sized houses and increasing mid- and small-sized houses supplies, thus more ordinary people can now afford a home, Wen said.

Chongqing began to tax all villas as well as new apartments priced at least two times the average price of all newly-built homes last year.


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