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Shanghai property tax targets new, spacious housing
By Leo Zhang and Zhang Fengming |
January 18, 2011, Tuesday
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Online Edition
Online Edition
Shanghai will levy a value-based property tax only on newly purchased homes that exceed a government-set living space threshold, Mayor Han Zheng told the city's legislators today.
Shanghai must take the step with a long-term view to rein in the red-hot real estate market, Han said in a meeting with the city's lawmakers. He didn't specify the tax rate, the space limit and other details in the property tax program.
Shanghai last year unveiled a series of measures including restricting a family to buying just one new home and freezing mortgage on third-home purchase to curb speculation in the housing market. Han said today that all these policies must be well implemented this year.
Earlier media reports said Shanghai and Chongqing have submitted their proposals to the State Council and are expected to impose the property tax in the first quarter of this year.
Some market insiders speculated that Shanghai would tax families who have a floor area of more than 200 square meters or 70 square meters per person. The tax rate is likely to be about 0.5 to 0.6 percent.
Chongqing is reportedly to tax all villas as well as apartments with a floor area of more than 144 square meters and priced at 2 to 2.5 times the average price.
China initiated rules on real estate taxes as early as October 1986 but exempted non-commercial properties. The Shanghai and Chongqing proposals are in effect versions of their current tax systems modified to include residential transactions.
Xu Yichao, a local lawmaker and deputy head of Shanghai Real-Estate Science Research Institute, said at the same meeting that the property tax can boost local fiscal incomes and reduce local governments' reliance on land sales to boost revenues.
Shanghai must take the step with a long-term view to rein in the red-hot real estate market, Han said in a meeting with the city's lawmakers. He didn't specify the tax rate, the space limit and other details in the property tax program.
Shanghai last year unveiled a series of measures including restricting a family to buying just one new home and freezing mortgage on third-home purchase to curb speculation in the housing market. Han said today that all these policies must be well implemented this year.
Earlier media reports said Shanghai and Chongqing have submitted their proposals to the State Council and are expected to impose the property tax in the first quarter of this year.
Some market insiders speculated that Shanghai would tax families who have a floor area of more than 200 square meters or 70 square meters per person. The tax rate is likely to be about 0.5 to 0.6 percent.
Chongqing is reportedly to tax all villas as well as apartments with a floor area of more than 144 square meters and priced at 2 to 2.5 times the average price.
China initiated rules on real estate taxes as early as October 1986 but exempted non-commercial properties. The Shanghai and Chongqing proposals are in effect versions of their current tax systems modified to include residential transactions.
Xu Yichao, a local lawmaker and deputy head of Shanghai Real-Estate Science Research Institute, said at the same meeting that the property tax can boost local fiscal incomes and reduce local governments' reliance on land sales to boost revenues.
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