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China's Shenzhen and Hainan could be property tax testing ground - Security Times

China's Shenzhen and Hainan could be property tax testing ground - Security Times

Resident buildings and offices are seen in Shenzhen, Guangdong Province, China, September 6, 2019. Picture taken September 6, 2019. REUTERS/Athit Perawongmetha

BEIJING: China has the conditions to advance trial work on a property tax, and Shenzhen city and Hainan province could be testing grounds for it, with both of them frontiers of China's reforms, a state-run newspaper reported, citing several experts.

The report came amid mounting speculation that China plans to push ahead with a long-awaited property tax after a meeting last week held by regulators deliberating the matter, and as consistent heat in the housing market raises concern about financial bubbles.

"The meeting is different from the past, it focused on the pilot work of property tax, which has rarely been mentioned by authorities before," the Security Times said.

The southern tech hub of Shenzhen should be the first candidate for the pilot programme, due to its runaway home prices in a heavily speculated market, according to the newspaper, citing a researcher with China's top think tank, the Chinese Academy of Social Sciences (CASS).

The tax scheme roll-out in the balmy southern island of Hainan would be much easier with its largely regulated property market meaning less resistance for implementation, another expert said.

Any trial could be promoted in a staged way, with cities with average home prices of more than 30,000 yuan (US$4,665.56) per square metre being taxed first, followed by cities with lower home prices, the CASS researcher said.

China's current market-curbing measures range from land price caps and home transaction restrictions to loan availability.

In March, China omitted mention of a property tax in its 2021 legislative plan for a second consecutive year as the government focuses on boosting consumption to cement an economic rebound. However, the legislation remains in the economic development plan for 2021-2025.

(US$1 = 6.4301 Chinese yuan renminbi)

(Reporting by Lusha Zhang and Ryan Woo; Editing by Robert Birsel)

Source: Reuters


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