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Experts divided on property tax merits
By Cao Qian |
April 10, 2010, Saturday
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Print Edition
Print Edition
INDUSTRY experts are divided on whether a property tax in China can help curb high housing prices and if it is proper to impose now.
The debate surfaced after a report by Shanghai Securities News on Thursday saying that Shanghai has been studying plans to impose the tax on home owners during the period they hold their homes. The report also said a draft scheme has already been worked out.
Home owners in China now pay the tax when they buy or sell their properties.
The Shanghai Housing Guarantee and Administration Bureau, the local industry watchdog, said on its Website the same day that the city would implement the central government policy once it is released, without giving further details.
"The property tax should be levied as soon as possible because it can definitely help curb speculation by raising the costs of holding a property," said Song Huiyong, director of research at Shanghai Centaline Property Consultants Ltd, operator of the city's largest estate chain. "However, it is inappropriate to just copy foreign practice here because home owners in China do not own the land on which their houses are built."
Speculation on real estate has become a very serious problem, especially in first-tier cities where up to 40 percent of new properties, excluding those for relocated residents under urban redevelopment plans, are currently vacant, Song said.
Not everyone agreed with that, however.
Yin Kunhua, a professor at Shanghai University of Finance and Economics, is among those against the tax. He argued other countries impose the tax on land ownership and it is rather unfair to levy it on Chinese home owners who just "rent" the land from the government.
He also cautioned that imposing the tax may likely exert further pressure on the high property prices as sellers will pass on their increased costs to buyers.
The debate surfaced after a report by Shanghai Securities News on Thursday saying that Shanghai has been studying plans to impose the tax on home owners during the period they hold their homes. The report also said a draft scheme has already been worked out.
Home owners in China now pay the tax when they buy or sell their properties.
The Shanghai Housing Guarantee and Administration Bureau, the local industry watchdog, said on its Website the same day that the city would implement the central government policy once it is released, without giving further details.
"The property tax should be levied as soon as possible because it can definitely help curb speculation by raising the costs of holding a property," said Song Huiyong, director of research at Shanghai Centaline Property Consultants Ltd, operator of the city's largest estate chain. "However, it is inappropriate to just copy foreign practice here because home owners in China do not own the land on which their houses are built."
Speculation on real estate has become a very serious problem, especially in first-tier cities where up to 40 percent of new properties, excluding those for relocated residents under urban redevelopment plans, are currently vacant, Song said.
Not everyone agreed with that, however.
Yin Kunhua, a professor at Shanghai University of Finance and Economics, is among those against the tax. He argued other countries impose the tax on land ownership and it is rather unfair to levy it on Chinese home owners who just "rent" the land from the government.
He also cautioned that imposing the tax may likely exert further pressure on the high property prices as sellers will pass on their increased costs to buyers.
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