Taxes to Quell Property Bubble
June 20, 2013 Taxation in China
BEIJING – Property buyers in major cities in China’s could soon be paying extra taxes on property purchases.
According to a new report released on June 19th by the Xinhua News Agency, the local governments of the cities of Beijing, Shenzhen, Nanjing, Hangzhou and Qingdao have submitted plans to Ministry of Housing, Ministry of Finance, State Administration of Taxation proposing to implement taxes on sales of property and housing in their particular cities.
Property taxes have already been trailed in Shanghai and Chongqing, where the tax on purchase of second homes was set in 2011 at a rate of up to 0.6 percent and 1.2 percent, respectively.
Xinhua has not provided on how the municipal authorities of the five cities plan to implement property tax in the territories, but experts believe that the measures will be targeted at high-income individuals, and could be levied on the purchase of second homes or on the transactions involving housing which is deemed to be luxurious.
The implementation of property taxes in China is being looked at as a potential means to calm the country’s booming housing market, with the tax to be used as a means of reducing speculative investment, and it is also expected that the additional revenues collected will provide a strong financial boost to the local governments.
Photo by dcmaster