According to China Daily, a member of the National People's Congress (NPC) said that China may launch a nationwide property tax as early as next year. The property tax has previously been piloted in Chongqing and Shanghai. The source said that the NPC is currently drafting a real estate tax law, which is expected to be completed by the end of this year and implemented in 2015.
Screenshot of the report
Unlike the pilot programs in Chongqing and Shanghai, which only tax property, the nationwide real estate tax will levy taxes on both buildings and land.
The report mentioned that the taxation method is still under discussion and may be adjusted. The tax rate for the property tax has not been determined, and there is no clear statement on whether the scope of taxation will target newly built properties or existing properties.
Ni Hongri, a researcher at the Development Research Center of the State Council, said on the 28th at the "High-end Forum on the New Normal Economy and the Implementation of Fiscal and Tax Reform Plans" that the NPC is currently drafting the real estate tax law, considering merging the existing property tax and urban land use tax, and listing the real estate tax as a local tax.
The urban land use tax is levied on land, calculated and collected based on the area of the land; the property tax is levied on buildings, based on the original value of the property. Houses are built on land. After these two taxes are merged in the future, that is, "integrating property and land", the tax calculation basis and tax base will change. The merged real estate tax will be levied based on the market appraisal value of the house.
Jia Kang, director of the Research Institute for Fiscal Science of the Ministry of Finance, previously suggested that when China implements the property tax, in cases where people are unwilling to pay the property tax or the owner cannot be found to pay the tax, a public notice can be made in the media. If the tax is not paid within three years after the public notice, the state can directly confiscate the house.
In 2011, Shanghai and Chongqing started property tax pilots as pilot regions. Shanghai levies property tax on housing with a per capita area exceeding 60 square meters (inclusive), at a rate of 0.6% or 0.4% of the annual housing price. Chongqing calculates based on "household area"; a family can only deduct the tax-exempt area for one taxable housing unit. There are two thresholds: 100 square meters and 180 square meters per household, with tax rates ranging from 0.5% to 1.2%.
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