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Beijing Regulates Pricing System for Real Estate Industry
The Beijing Municipal Government released its new "Administrative Regulations for the Pricing Structure of Commercial Housing Properties"recently, aiming at cntering the excessive prices for commercial real estate in the city. The new Regulations went into effect from June 1.
It is believed that the new Regulations will enable house buyers to better understand the structure of the commercial houses pricing system and restrain the excessive prices and profits of the real estate industry in the city. Meanwhile, the new Regulations also adjust the related administrative fees, which is expected to lead to the reduction of the construction costs for developers and cast a positive influence on future real estate development.
The Regulations outline the following five parts as the major factors affecting house prices: 1. The developing cost of the houses to be sold, including cost for land renting, cost for land use, compensation cost for former inhabitants moving out, cost for land planning, cost for project designing, cost for construction and installation, annexed construction cost and indirectly related costs; 2. In process construction costs, including management cost, financial cost and cost for sales; 3. Taxes, e.g. VAT, tax for city maintenance and developing, tax for education; 4. Other administrative fees designated under related laws and regulations; 5. Reasonable profits.
It is promised by the municipal government that the pricing authority will formulate and promulgate the detailed items affecting the whole prices of commercial housing properties.
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