Thu, March 29, 2012
Business > Economy

Beijing denies rumors of impending property tax launch

2012-03-29 15:16:25 GMT2012-03-29 23:16:25(Beijing Time)  Global Times

The Beijing authorities have rejected speculation that the capital city is set to be included in the property tax trial program, following the central government's announcement that the program would be extended beyond Shanghai and Chongqing this year.

Beijing Municipal Commission of Housing and Urban-Rural Development said Tuesday that Beijing had no plan yet to launch the property tax, the Beijing News reported.

Qi Ji, vice minister of Housing and Urban-Rural Development (MOHURD), said Sunday that the country will extend the trial program to more cities this year, prompting media speculation that the tax would extend to Beijing, Guangzhou and Shenzhen.

Property taxes have been levied on existing high-end houses in Chongqing and newly built ones in Shanghai as part of a trial program since last year.

MOHURD has not yet decided on which cities will be the next to be included in the program this year since the government is still reviewing the experiences from the pilot cities, according to Qi.

Li Jingguo, a property researcher with the Chinese Academy of Social Sciences, told the Global Times yesterday that it would be more effective and comprehensive to promote property tax trials in different types of cities in various parts of the country, even though the government's plan is still unknown.

"The goal for this trial is to discover the situations in different kinds of cities so that the government can stipulate related regulations or even laws to launch a nationwide property tax program," Li said, noting that first-time buyers should be exempted from the tax.

In a move to curb the speculation that has pushed up house prices, the government started to enforce purchase restrictions for house buying in 2010.

Housing prices fell month-on-month in 45 of the 70 major cities monitored by the central government last month, and only four cities saw price gains, according to data released by the National Bureau of Statistics last week.

"Together with the purchase restrictions, the property tax has brought speculation under control and it will have a long-term effect since the tax applies as long as you own the property," Hui Jianqiang, a property researcher at Shanghai-based E-house China Research and Development Institute, told the Global Times.

Hui predicted that detailed plans for the next round of the trial will be announced in the second half of the year and will include cities with a more mature property market.


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