China Prioritizes Property Tax To Regulate Market
(Photo: REUTERS/Shu Zhang/File Photo GLOBAL BUSINESS WEEK AHEAD)
It was recently reported by the Chinese state media that the country's legislative body is making property tax is a top priority. This is seen by many observers as one of China's biggest and most crucial decision in order to control both the domestic and international market.
Reports reveal that China's Standing Committee of the National People's Congress considers property tax as one of the 69 new levies that will be treated with top priority with regards to the country's five-year agenda. The state media also reported that the real estate tax is crucial in the overall development of the country.
Many analysts said that the decision to prioritize national property tax is the government's way of dealing with the rise in the speculative market. On the other hand, some observers are seeing that this decision might stand as a risky blow when it comes to market sentiment.
China economic research head of UBS Group AG based in Hong Kong said that the new property tax will pass the legislative body before the end of the year.
The property tax will target residential flat owners. This particular segment represents the largest fraction of household wealth based on latest data. The priority tax is seen as a way to rein house prices, a particular factor that has been fluctuating for quite some time already. The new property tax is also expected to boost government revenue.
According to some political analysts, there are two sides to this tax debate. One side tackles whether to impose the new tax regulations. The other side argues that if new tax property is imposed, when and how should it be imposed. Despite the clear distinction of these two arguments, both diverge in terms of scope and the intensity of tax to be levied. Some are also arguing that the new property tax is canceled for those living in flood-prone areas.
This new property tax has been in the making for quite some time already. Since the start of President Xi Jinping's second five-year term, efforts allotted towards the preparation of the property tax bill have been hectic. Among the first to be established as the national platform that can register various property ownership information.
It has been observed that China's residential market is well under control. This is despite the fact that there has been a continued push towards the promotion of rental housing in the country.