BEIJING, Oct. 17 (Reuters) – China may extend land tax pilot trials to Zhejiang province, a former government expert said in official media on Sunday, the latest sign the country is moving closer to the adoption of the long-discussed levy.
China launched a land tax pilot program in Shanghai and Chongqing in 2011, and experts have suggested in the past that the pilot tests be expanded to include Shenzhen City and Hainan Province, according to state media.
President Xi Jinping on Friday called for progress on a property tax that could help reduce wealth inequalities as the country strives to meet its goal of “common prosperity” by mid-century. Read more
âChina could consider leading innovations in the system to expand the scope of property tax while pushing forward tax legislation as soon as possible,â said Jia Kang, former director of the Chinese Academy of Tax Sciences supported by the Ministry of Finance, according to China Property News. , which is managed by the Ministry of Housing.
China has been considering introducing a property tax for more than a decade, but has faced resistance from stakeholders, including local governments, who depend on income from land sales and fear it will erode value. of properties or does trigger a massive sale in the market.
However, such a tax could help curb rampant speculation in the housing market, which is under scrutiny globally as large developer China Evergrande Group (3333.HK) grapples with a debt and liquidity crisis. Read more
Jia suggested extending the land tax lawsuit to the wealthy eastern province of Zhejiang.
Real estate prices vary widely in China, with prices several times higher in prominent cities such as Beijing and Shanghai compared to markets in hinterland cities.
âGenerally speaking, the third and fourth tier cities would not be part of the first batch for a property tax lawsuit,â Jia said, adding that any property tax regime would have to adapt to regional circumstances. .
China has levied property taxes on certain categories of high-end residences in Shanghai and Chongqing since the pilot program began in these cities in 2011.
In March, the Chinese government said in its development plan for 2021-2025 that it would push for property tax legislation over the next five years, but there was no mention of such a tax. in the country’s legislative program for 2021 for the second year in a row.
Reporting by Muyu Xu and Tony Munroe; Editing by Ana Nicolaci da Costa
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