 Recently an official with the state tax bureau said the preparation work for property tax is underway. The policy on property tax again has become the focus of the housing market.
Let's take a look at some opinions on that from the media.
A cartoon featuring potential property tax. [Photo: cnsphoto]
The China Times carries an article saying the move indicates the resolution of the government to cool down the housing market. As proved by numerous figures, surging housing prices are pushed by nobody else, but speculators. To multiple-home owners, the property tax will be a huge deterrent. Meanwhile, how much a house is worth becomes a key issue. The tax will be charged annually and may go up with the market value of the property. Therefore it's essential to evaluate homes fairly.
The article also says, buying a home for investment purposes shows a transfer of wealth to properties and the properties reflect a visible gap between the rich and the poor. Though the tax is designed to adjust the gap, the problem actually lies in the imbalance of interests among stake holders. So the solution is in how to look at the loopholes of the real estate market, how to straighten up the rules and regulations and how to adjust the interests.
But the other side of the coin is that property tax might limit the development of the real estate industry, as some may believe. Towards this concern, an article from the China Securities Journal says it's not likely. The article says most of the industry players think the policy will be carried out gradually. Therefore it will not pose any threat to the property market in China.
The author explains that gradual changes are practical. Researchers from the industry forecast that it's more feasible for the policy to go through a trail run in small areas first and then go to big ones, and in high-end properties and then go to low-end ones.
The article believes, a property tax may not necessarily result in a drop of the price, as other factors may keep the housing market hot. It says the tax will not stop the needs for low-end residential properties. As for high-end ones, their prices will depend on the base rate of property tax and on how forceful the government intervention will be.
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