China to Expand Property Tax Trail to Check Speculation

• 25 October 2021
• International News
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The Chinese government has decided to expand the property tax trail, which is a part of reforms in the sector aimed to promote “rational housing consumption”.

China’s top legislature, the National People’s Congress Standing Committee, on Saturday approved the latest plan, according to Xinhua.

The announcement comes with President Xi Jinping pushing for more “common prosperity” in China aimed at spreading wealth more evenly.

Under the five-year pilot scheme, Xinhua added, property tax will be levied on all types of real estate, excluding some rural homes.

In 2011, authorities started trials in Shanghai and Chongqing targeting high-end private residential properties for taxation.

There have been talks to expand such taxation, but localities have been reluctant, worried it will drag down property values and dampen demand for land, a key source of local government revenue, state-run tabloid Global Times said Saturday.

China’s real estate sector is in troubled waters, with home sales slumping 16.9% on-year in September and deeply indebted property giant Evergrande battling a liquidity crisis.

• Analysis
• Economy and Finance