China’s Standing Committee of the National People’s Congress (NPC), the country’s highest legislative body, recently authorized the State Council to launch a property tax scheme in pilot areas. The pilot schemes will last five years.
According to the NPC resolution passed on October 23, the property tax targets both residential and non-residential real estate excluding legally owned rural residential land. The State Council will work out a general program for the tax, and local governments in pilot areas may design specific rules on how to implement it.
To curb real estate bubbles and guide reasonable use of land, the Chinese government has been mulling property tax for years. Analysts said the pilot schemes show the government’s determination to promote the healthy development of the real estate market and to promote common prosperity by taxation. Analysts said it is important to define the tax-free range, which should differ according to regional economic levels.
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