SHANGHAI would this year prepare for a trial property tax, Mayor Han Zheng said in a government report yesterday.
Han gave no details of how much the tax would be or when it would be implemented. China is expected to introduce a 0.8 percent tax rate, which will have a limited impact on the market, according to Jan. 10 reports by domestic media.
China has pledged to speed up trials for a property tax to curb surging prices that have made housing too expensive for an increasing proportion of the population. Premier Wen Jiabao said Dec. 26 that measures to rein in housing costs weren t well implemented and that he would introduce more policies to crack down on speculation.
We will step up macro-control measures, prioritize the supply of non-luxury residential units to be owned and occupied by ordinary citizens, and prepare for the trial reform on property tax as required by the Central Government, Han said in the work report to the Municipal People s Congress.
Shanghai would also begin building 220,000 units of subsidized housing as it pushed forward with plans to create affordable homes, Han said.
The cities of Shanghai and Chongqing were expected to be first to roll out property taxes in China, according to domestic media Jan. 10. Shanghai could introduce a tax on new homes in the first quarter while the southwestern city of Chongqing could impose a luxury-property tax at the same time, they reported.
Home prices in Shanghai jumped 26.1 percent in 2010 and those in Chongqing surged 29.4 percent, according to Soufun Holdings Ltd., the country s biggest real estate Web site owner.
The property tax for Shanghai this year would have a minimal impact because the levy was expected to be low, said Michael Klibaner, head of China research at Jones Lang LaSalle Inc., the world s second-biggest publicly traded commercial-property broker. He estimates China s home prices will rise 5 percent to 7 percent this year.
The Century Weekly magazine reported earlier this month that the tax could be delayed following disputes between government departments.
Chongqing planned to introduce the tax for both new and existing homes, Mayor Huang Qifan said in an interview with CCTV aired Jan. 12, without providing further details.
Beijing would not join the trials, Beijing News reported yesterday, quoting Ji Lin, deputy mayor of the capital city.(SD-Agencies)
