China to Pilot Property Tax in Some Regions to Tackle Affordability Crisis
The top decision-making body of the Chinese parliament will roll out a pilot real estate tax in some regions. The State Council, or Cabinet, will determine which regions will be involved and other details, Xinhua added. The long-mooted and long-resisted property tax has gained new momentum since President Xi Jinping threw his support behind what experts describe as one of the most profound changes to China's real estate policies in a generation. A tax could help red-hot home prices that have soared more than more than 2,000% since the privatization of the housing market in the 1990s and created an affordability crisis in recent years. The tax will apply to residential and non-residential property as well as land and property owners, but does not apply to legally owned rural land or where residences are built on it. The pilot schemes will last five years from the issue of the details from the State Council. The idea of a levy on homeowners first surfaced in 2003 but has failed to take off due to concerns that it would damage property demand, home prices, household wealth and future real estate projects. But until now the pilot programs have not been widened to more cities. "It is expected that Zhejiang is likely to be included in the reform, especially Hangzhou," said Yan Yuejin, director of Shanghai-based E-house China Research and Development Institution.
Tags : INTERNATIONAL property tax China home prices Chinese Parliament homeowners Affordability Crisis President Xi Jinping