Economist: Property tax to stabilize housing prices, curb speculation

Jia Kang, a tax expert and member of the Chinese People's Political Consultative Conference (CPPCC), the country's top political advisory body [Photo provided to China.org.cn]

China has for years considered a country-wide property tax to curb speculation. It introduced a trial program in Shanghai and Chongqing in 2011 with the former targeting ownership of multiple houses and the latter focusing on high-end housing.

When asked about the lower-than-expected impact on both cities’ real estate market, Jia explained that the situation could be much worse if the taxes were not implemented.

"We should not expect too much influence on China's runaway housing prices, but pay more attention to its stabilizing results."

Home-buying restrictions may prove their effectiveness to cool down the market in the short term; but in the long run, the government needs to pull out more comprehensive policies combining a portfolio of measures in terms of finance, land-use, fiscal and taxation as well as investment, he added.

In a recent press conference, senior officials with China's Ministry of Housing and Urban-Rural Development revealed that related government agencies are revving up legislation efforts regarding the long-awaited property tax and will advance reform of the property market in time of need.