China could widen property tax trial, official media outlet reports

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BEIJING, Oct 17 (Reuters) – China could increase pilot testing of a property tax to Zhejiang province, a former authorities knowledgeable was quoted as saying in an official media outlet on Sunday, the newest signal that the nation is shifting nearer to adopting the long-discussed levy.

China launched a pilot property tax programme in Shanghai and Chongqing in 2011, and specialists have prior to now recommended that the pilot testing be broadened to incorporate Shenzhen metropolis and Hainan province, in line with state media.

President Xi Jinping on Friday known as for progress on a property tax that could assist cut back wealth inequality because the nation strives to realize his aim of “common prosperity” by mid-century. learn extra

“China could consider conducting system innovations to expand the scope of property tax while moving forward with tax legislation as soon as possible,” stated Jia Kang, ex-director of the finance ministry-backed Chinese Academy of Fiscal Sciences, in line with China Property News, which is managed by the housing ministry.

China has mulled introducing a property tax for over a decade however has confronted resistance from stakeholders together with native governments, which depend on income from land gross sales and fear it could erode property values or set off a market sell-off.

However, such a tax could assist curb rampant hypothesis within the housing market, which has come underneath intense international scrutiny as large developer China Evergrande Group (3333.HK) struggles with a debt and liquidity disaster. learn extra

Jia recommended extending the property tax trial to the rich japanese province of Zhejiang.

Real property costs range drastically inside China, with costs many instances larger in tier-one cities reminiscent of Beijing and Shanghai in contrast with markets in hinterland cities.

“Generally speaking, third- and fourth-tier cities would not be among the first batch for a property tax trial,” Jia stated, including that any property tax regime ought to adapt to regional circumstances.

China has been accumulating property taxes on sure classes of high-end residences in Shanghai and Chongqing for the reason that pilot programme began in these cities in 2011.

In March, the Chinese authorities stated in its improvement plan for 2021-2025 that it could push for property tax laws over the following 5 years, however there was no point out of such a tax within the nation’s 2021 legislative agenda for the second consecutive 12 months.

Reporting by Muyu Xu and Tony Munroe; Editing by Ana Nicolaci da Costa

An excavator is seen at a construction site of new residential buildings in Shanghai, China, in this March 21, 2016 file photo. REUTERS/Aly Song//File Photo

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