A draft property tax will be submitted to the Standing Committee of the All-China People’s Assembly this year. This project is believed to force the development of China’s real estate market. It is worth admitting that the government of the country has been working on this issue for some time so far. The first steps were done in Chongqing and Shanghai already back in 2011. These two cities were the pioneers where active steps were taken to advance the discussed property tax law.
The government positions this legislative proposal also as a measure of eradication of profiteering on the real estate market of the country. In fact, the real estate tax is seen as a mechanism for cooling the housing market. It is expected that it can become a relatively stable source of income for local governments.
It is widely believed that property tax will be levied, but the state of the economy is such that the government is likely to slowly promote its introduction. The Chinese government officials also have plans to better address the housing needs of people and to support the sustainable and healthy development of the real estate market.
However, according to the schedule of reforms established earlier by the Politburo of the Central Committee of the Communist Party of China, all the tasks of reform will be basically fulfilled by 2020.
According to Liu, there are now 10 types of taxes that are not yet fixed by law. The prices for new housing in China in December grew at the lowest rate in eight months against the backdrop of government restrictions on speculation and a slowdown in the economy.
It is noted that although housing prices in major cities fell in response to measures to tighten regulation, the lack of real estate tax also became an obstacle to the country’s advancement to other tax reforms.
Though, the experts assure that property taxes will not have a big impact on those who have a “real interest” in buying a home, but will increase the cost of speculation and help eliminate the risk of a price “bubble” on the real estate market.