House property tax is expected to become regional governments’ main source of tax revenue in the future, especially in cities where land has almost all been sold, said Yin Zhongqing, deputy director at the Financial and Economic Affairs Committee of the National People's Congress, according to
21st Century Business Herald.
But legislation on property tax, especially that of residential property, is made difficult by its unclear relation to other tax categories and the complex classification of property ownership in China, Yin said.
The introduction of a property tax scheme will primarily create a need to integrate existing land-related charges such as land transaction fees and taxes on land occupation and value gains, Yin said.
Other taxes that property owners have already paid – for a variety of reasons during real estate construction and sales transactions – also need to be deducted accordingly while an overall property tax scheme is applied, he added.
Since 1997, China has classified property ownership into a complex range of categories, which include military-owned, central government-owned, as well as so-called “big ” and “small” ownerships, lasting 70 years and as short as 30. Situations in the countryside are even more complex, Yin said, where buildings have more dubious ownership.
Shantytowns inside cities have an equally complicated nature, Yin added. He said all these situations need to be further studied and discussed.
Property tax, which will be made much higher in amount than property management fees and bank loan interest, is designed to increase the costs owning extra houses, Yin said. The purpose is to increase housing supply in the market without having to provide more land, he said.
That should be able to counter the soaring house prices in some cities, Yin said.
Old Version
