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Property tax trial likely to expand
By Cherry Cao |
August 21, 2012, Tuesday
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Print Edition
Print Edition
THE central provinces of Hubei and Hunan may be next to implement a property tax trial as detailed rules are being drafted, a newspaper under the Ministry of Land and Resources said yesterday, citing unnamed sources at the State Administration of Taxation.
The expanded program in the two provinces may impose a tax on second homes, whether newly bought or not, owned by local families, the paper said.
A mild tax rate may be adopted in the two provinces and market price, instead of purchase price, will be used to calculate the exact tax amount, the paper said, without elaborating.
All provinces in China will adopt the property tax "when conditions are ripe," the Ministry of Finance said earlier in a statement.
The expanded program followed a similar tax trial which has been used in Shanghai and Chongqing since last January.
Shanghai imposes the property tax on homes bought on or after January 28, 2011 by local families who already have one or more homes. Chongqing's tax targets newly-bought high-end homes only.
"It could be significant progress if more properties, rather than newly purchased ones only, are covered by the property tax program," said Song Huiyong, research director at Shanghai Centaline Property Consultants Ltd. "If implemented, that will definitely leave a much bigger impact on the local housing market as it would squeeze speculators out of the market efficiently."
Critics have said the property tax confined to newly-bought homes only as well as a mild rate of between 0.4 percent and 0.6 percent in Shanghai and between 0.5 percent and 1.2 percent in Chongqing have been ineffective in curbing excessive housing demand in the two cities.
But Sky Xue, an analyst with China Real Estate Information Corp, said the rate showed "the government is taking a very cautious attitude expanding the property tax."
The expanded program in the two provinces may impose a tax on second homes, whether newly bought or not, owned by local families, the paper said.
A mild tax rate may be adopted in the two provinces and market price, instead of purchase price, will be used to calculate the exact tax amount, the paper said, without elaborating.
All provinces in China will adopt the property tax "when conditions are ripe," the Ministry of Finance said earlier in a statement.
The expanded program followed a similar tax trial which has been used in Shanghai and Chongqing since last January.
Shanghai imposes the property tax on homes bought on or after January 28, 2011 by local families who already have one or more homes. Chongqing's tax targets newly-bought high-end homes only.
"It could be significant progress if more properties, rather than newly purchased ones only, are covered by the property tax program," said Song Huiyong, research director at Shanghai Centaline Property Consultants Ltd. "If implemented, that will definitely leave a much bigger impact on the local housing market as it would squeeze speculators out of the market efficiently."
Critics have said the property tax confined to newly-bought homes only as well as a mild rate of between 0.4 percent and 0.6 percent in Shanghai and between 0.5 percent and 1.2 percent in Chongqing have been ineffective in curbing excessive housing demand in the two cities.
But Sky Xue, an analyst with China Real Estate Information Corp, said the rate showed "the government is taking a very cautious attitude expanding the property tax."
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