Economy

Think tank proposes nationwide property tax

(Xinhua)
Updated: 2011-05-06 13:42

BEIJING - China's leading think tank on Thursday released a report suggesting spreading the real estate tax levy from the current two cities of Chongqing and Shanghai to other parts of the country in the forthcoming five years.

The proposal was voiced by the Chinese Academy of Social Sciences (CASS) in its annual report on China's real estate sector. It came as the country has adopted a series of measures since last year to tame housing prices, including higher down payment requirements, raising interest rates, third-home purchase bans.

The CASS believed that spreading the property tax levy to the whole country would help create a sustainable source of revenue for local governments through advancing taxation of property possession, and would help curb the soaring home prices and narrowing the income gap between the rich and poor.

Related readings:  CBRC denies reports of down payment rise  Home prices rise in April  Should property tax be collected in all cities of China?  China to gradually expand property tax program to nationwide

"The collection of property taxes will not only help guide reasonable spending on housing, but also help curb a gap in distribution of wealth and income," said the CASS, "Such move will also encourage local governments to change from depending on sales of land for revenue to relying on taxes for revenue."

Chongqing in southwest China and Shanghai on east China's seaboard are the first two cities in the country to have a trial run of property tax early this year.

The CASS stressed the importance of setting the threshold and targets for property tax levy in a scientific and appropriate manner, and of incorporating taxes and fees in real estate development and transaction.