Log in
Show password
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 
News: Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies & ForexEconomic EventsCryptocurrenciesCybersecurityPress Releases

China to pilot property tax scheme in some regions -Xinhua

10/24/2021 | 07:00pm EST
A man rides a scooter past apartment highrises that are under construction near the new stadium in Zhengzhou

SHANGHAI (Reuters) -The top decision-making body of the Chinese parliament said on Saturday it will roll out a pilot real estate tax in some regions, the official Xinhua news agency reported.

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 cool red-hot home prices that have soared more than more than 2,000% since the privatisation of the housing market in the 1990s and created an affordability crisis in recent years.

But talk of the plan is coming at a sensitive time, as China's property market is showing significant signs of stress and home prices have started falling in tens of cities.

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, Xinhua said.

The pilot schemes will last five years from the issue of the details from the State Council.

The idea of a levy on home owners 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.

It has faced resistance from stakeholders including local governments, who fear it would erode property values or trigger a market sell-off.

Over 90% of households own at least one home, the central bank said last year.

But analysts say the tax will bring in much needed revenue.

"Land sales are not a sustainable source of government revenue any more," Capital Economics said in a note on Friday. "Gradual implementation should also mitigate fears that a tax could cause prices to crash."

In pilot programmes rolled out in 2011, the megacities of Shanghai and Chongqing taxed homeowners, albeit just those possessing higher-end housing and second homes, at rates from 0.4% to 1.2%.

But until now the pilot programmes have not been widened to more cities.

Analysts expect a wider pilot to first include wealthier and economically more diversified regions in eastern and southern China such as the provinces of Zhejiang and Guangdong.

"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.

Hangzhou, the base of e-commerce giant Alibaba, is China's eighth-richest city, with economic output reaching 1.61 trillion yuan ($252 billion) last year, about 70% of Hong Kong's gross domestic product.

($1 = 6.3839 Chinese yuan renminbi)


Mainland China's Reliance on Land Sales by province) https://tmsnrt.rs/3lyvluJ


(Reporting by Steven Bian and Engen Tham in Shanghai; Additional reporting by Ryan Woo and Liangping Gao in Beijing; editing by Kim Coghill and Jason Neely)

ę Reuters 2021
Latest news "Economy & Forex"
05:00aEuro zone inflation hits record high in likely peak
04:58aGermany has to decide on gas-to-power plants quickly - grid operator, NGO
04:55aArrest of Macau junket mogul rattles the world's largest gambling hub
04:54aMalaysia's ATA falls as analyst airs concern after Dyson rift
04:54aEquinor ceo says he doesn't see a big impact from new covid variant on oil and gas demand, believes vaccination level should help keep societies open
04:54aAirline easyJet sees softening in demand as COVID clouds outlook
04:51aUnctad says global trade growth stabilized during the second half of 2021, increasing by about 1%quarter-over-quarter. the outlook for 2022 remains very uncertain
04:50aSouth Africa's unemployment rate hits new record high in Q3
04:49aKREMLIN : new gas transit deal talks with Ukraine hinge on gas demand in Europe
04:49aModerna CEO warns COVID-19 shots less effective against Omicron, spooks markets
Latest news "Economy & Forex"