Econintersect: Property taxes for residential real estate soon may be more wide spread than they have been. The Shanghai Daily reports that the Chinese government is “actively studying” an expansion of its experimental propert tax program. Nearly two years ago China announced an experimental property tax in two of its largest urban centers in a move intended to crack down on speculation and curb rising prices in residential real estate. The move to implement a property tax like the one used in the U.S. and other western countries, was announced for Chongqing and Shanghai at the end of January 2011.
Other curbs on residential real estate speculation implemented in early 2011 included a 60% down payment requirement for second homes. These steps have cooled the housing bubble somewhat and have been followed by a peak in inflation six months later and a steady disinflationary trend since.
Housing sales have cooled over the intervening time, but have recently picked up. The National Bureau of Statistics reports that housing sales rose in the first ten months of 2012 by 5.6% year-over-year to 4.63 trillion yuan (US$735 billion). This was a significant increase increase over the 2.9% rise for the year to date just one month earlier.
- Property tax program trial may be expanded (Xinhua, Shanghai Daily, 13 November 2012)
- China Starts Trial Property Tax to Market (Esther Fung, The Wall Street Journal, 28 January 2011)
- China: CPI Lower than Expected, PPI Contraction Continues (GEI News, 09 November 2012)