Zhongnanhai suddenly passed heavy news four departments jointly discuss real estate tax

A real estate salesperson introduces a property to a customer in Beijing on April 8, 2009.

The real estate tax is related to thousands of households in China and has been attracting much attention in recent years. on May 11, there was a big news from Zhongnanhai that four departments of the Chinese Communist Party, including the Ministry of Finance, held a forum on real estate tax reform pilot work in Beijing. The news immediately rushed to the microblogging hot search.

According to the news on the website of the Ministry of Finance of the Communist Party of China on May 11, the heads of the Ministry of Finance, the Budget Committee of the Standing Committee of the National People’s Congress, the Ministry of Housing and Urban-Rural Development and the General Administration of Taxation held a symposium on the pilot work of real estate tax reform in Beijing to listen to the opinions of the heads of some city governments and some experts and scholars on the pilot work of real estate tax reform.

Prior to that, on May 6, Liu Kun, Minister of Finance of the Communist Party of China, wrote an article in the Economic Daily, “Establishing a sound modern fiscal and taxation system conducive to high-quality development”, in which he mentioned actively “promoting real estate tax legislation and reform”.

In another article on Dec. 23 last year, Liu Kun also proposed to actively and steadily promote real estate tax legislation and reform in accordance with the principle of “legislation first, full authorization and step-by-step advancement”.

Yan Yuejin, research director of the think tank center of the E-House Research Institute, said the real estate tax symposium has a strong vane significance, further prompting people to pay attention to the real estate tax.

In fact, the authorities have put a real estate tax on the agenda as China’s economy has slumped in recent years and the real estate bubble is facing a collapse, with a real estate tax once on the horizon during the 2019 Communist Party’s “two sessions” and authorities saying they want to complete real estate tax legislation.

However, China’s economy was hit hard again last year by the outbreak of the Chinese Communist Party virus. In the Government Work Report for 2020 and 2021, the authorities did not mention a single word about real estate tax.

But recently the Ministry of Finance has proposed to actively promote real estate tax legislation during the 14th Five-Year Plan, signaling a reactivation of real estate tax legislation.

U.S.-based economist Cheng Xiaonong wrote an article in Free Asia on January 4: From a macroeconomic perspective, the Chinese Communist Party will sooner or later impose a property tax. As a result of the property tax, local governments will have a new source of revenue, but the overall economy will have less consumption as a result, leading to more depression in the service and manufacturing sectors.

According to Cheng Xiaonong, the real cause of the property tax looming on the doorstep is the possible break in land finance. For the past 20 years, the CCP’s local finances have relied on land sales to build houses to maintain local revenues. At the height of the epidemic in the first quarter of last year, local governments’ revenue from the sale of state-owned land use rights was 1.1 trillion yuan, down 8%; by the end of September, local governments kept increasing their land selling actions, and local governments’ revenue from the sale of state-owned land use rights in the first 3 quarters was 4.9 trillion yuan, up 10%. It looks like local governments will still be able to get by with their land finances in 2020.

However, China’s property market is already in a situation where supply exceeds demand and is starting to go downhill. If real estate can’t sell, local governments can’t sell land, and land finance will be cut off. The only alternative to land revenue is a real estate tax.

Economist Wang Shangyi also holds the same view, and on July 7, 2017, he wrote in Position News that in the face of the collapse of real estate, local governments must find new sources of revenue to make a living, and the property tax has become the first choice. He reminded everyone to remember one thing, the Chinese Communist Party system will never do a money-losing deal, loss or not refers to the system, not slaves, and the whole point of living as a slave is to supply blood to the system.

In the opinion of the experts, it is only a matter of time before the property tax is levied, but the people are concerned about how the property tax will be levied.

As early as January 28, 2011, Shanghai and Chongqing have implemented a property tax pilot, the Shanghai authorities launched the “Shanghai Interim Measures to Carry out a Pilot Property Tax on Some Individual Houses”, the object of the levy is the city residents newly purchased houses and belong to the second set of housing and above and non-residents newly purchased houses, the tax rate is provisionally set at 0.6%. Although the property tax pilot did not go ahead, it has not been far away either.

On March 7, 2018, Pan Shiyi, chairman of SOHO China, put forward three views on Weibo regarding the levy of property tax: legislation first, don’t pilot; full authorization, that is, local tax, local say, let each city and province collect themselves; step-by-step implementation, that is, if there are conditions, levy, if there are no conditions, don’t levy, the first set of houses should never be collected, the second set of houses should not be levied, three sets, four sets The first house should never be collected, the second house should not be levied, three, four, five or more sets of houses are full of people, hurry to levy their taxes.

The mainland network for the levy of real estate tax is a one-sided criticism, netizens Changsha property market Guo Shuwei: before calling on everyone to buy a house, after buying a house locked for five or ten years not allowed to sell, after the house into the stock house era, the new house is getting less and less, then start collecting taxes …… set too deep.

Long River Sunset x_60065: Many people think that the collection of real estate taxes will curb housing prices, but I do not know that this is to the local government to open another financial road.

Wo Wo Doo Doo: I bought a house when the government did not say that the annual property tax, I bought you then find me an extra charge, to face?

Shoudou: The main purpose of the property tax levy is to reopen a financial path for the government in the case of unsustainable land finance, the main concern is to collect more money to meet government spending, not to reduce housing prices or to combat speculation. The main body of speculation, is the government, how can they fight themselves?