CHINA S real estate tax would be based on the original value of the property, which includes the price of the land, cost of land-usage rights and the cost of development, according to the Ministry of Finance and the State Administration of Taxation in a statement over the weekend.
For parcels of land with a plot ratio of less than 0.5, the land price would be calculated based on two times the floor area of construction, the statement said, adding that the changes were effective immediately.
The statement also said that real estate owners who lease their property would have to pay the real estate tax even during periods when they do not collect rent from tenants.
This is the first time officials provided details of the tax ever since it became widely anticipated in recent months to be expanded to include residential property. The statement, however, did not include details on whether the tax would be levied on residential property, nor did it provide a timetable on when the tax will be rolled out to include residences.
Analysts expect Shanghai and Chongqing to be the first cities to launch the tax, which will form part of the government s efforts to damp property speculation due to high housing prices and provide a recurring source of income for local governments to reduce their reliance on income from land sales.
(SD-Agencies)
