China is set to expand pilot property tax reforms, state media reported, as the government battles real estate speculation in the worlds second-biggest economy.<\/p>\n
Chinas housing market took off after key 1998 reforms sparked a building boom on the back of rapid urbanisation and wealth accumulation.<\/p>\n
But as prices soared, so did worries about wealth disparity and the resulting potential for social instability.<\/p>\n
Chinas top legislative body, the National Peoples Congress Standing Committee, on Saturday approved the latest plan to promote rational housing consumption, according to the official Xinhua news agency.<\/p>\n
Under the five-year pilot scheme, Xinhua added, property tax will be levied on all types of real estate, excluding some rural homes.<\/p>\n
Further details, such as its start date and target areas, are expected to be disclosed at a later date.<\/p>\n
The announcement comes with President Xi Jinping pushing for more common prosperity in China aimed at spreading wealth more evenly.<\/p>\n
In 2011, authorities started trials in Shanghai and Chongqing targeting high-end private residential properties for taxation.<\/p>\n
There have been talks to expand such taxation, but localities have been reluctant, worried it will drag down property values and dampen demand for land, a key source of local government revenue, state-run tabloid Global Times said Saturday.<\/p>\n
Chinas real estate sector is in troubled waters, with home sales slumping 16.9 percent on-year in September and deeply indebted property giant Evergrande battling a liquidity crisis.<\/p>\n
Some analysts believe, however, the latest tax move is aimed at preventing prices from rebounding to earlier levels.<\/p>\n
The chances of a national tax being implemented are much higher now, said Mark Williams of Capital Economics last week as reports emerged that a plan was being stalled.<\/p>\n
Opposition to the tax from insiders was not new, he added, given that correlation between Communist Party membership and ownership of multiple properties is probably fairly high.<\/p>\n
But demographics mean the 25-year property boom is ending, he said.<\/p>\n
Land sales are not a sustainable source of government revenue anymore. A modest property tax could be.<\/p>\n
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China to expand property tax trial to check speculation - Macau Business<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" China is set to expand pilot property tax reforms, state media reported, as the government battles real estate speculation in the worlds second-biggest economy. Chinas housing market took off after key 1998 reforms sparked a building boom on the back of rapid urbanisation and wealth accumulation. Continue reading