Tax Policy Study In Housing Security

Any country in the world has undergone the same problem that is the living equity of the low-middle income. Especially in the developing country, because of low income and high housing price, many low-middle income classes can't afford the house. The ratio of house price to income in most of cities of China is higher than the standard in the word. Now house price in most cities of China is rising all the way. The basic living right of the poor is challenged. In order to guarantee the basic living right of the poor, the government assistances are necessary. So housing security is built.In China, housing security was built a short time ago, which relied on economic housing and low- price housing. But in the beginning of economy development, adding population factor, the limited security cann't meet the low-middle income's demand. And the middle income class is excluded from the security. The situation that high income class buy house in market, the lowest income class enjoy the housing security, but the low-middle income class cann't afford the house in market and also cann't enjoy the security housing is formed. If the situation cann't be resolved, the goal of housing equity cann't be obtained.Now, "limit price housing" is built to resolve the housing problem of low-middle income class in some area. On one hand, the quantity of supply is scarce, and on the other hand, the large scale of "limit price housing" could bring up deviation of resourse allociation. So we have to look for another way to resolve the housing problem of low-middle income class, and tax policy is a feasible choice.From the aspect of the content of tax policy in housing security, the policy includes tax preferential-subsidies policy and tax regulation policy. The front is that government lowers tax, giving housing supplyer and demander preferential measures on tax-base, tax-rate and taxation merit. These will stimulate supply and demand. The latter is that government restrains developer from stationing land, decrease free-housing and regulates high house price. This dissertation will focus on tax preferential-subsidies policy.From the aspect of the goal of tax policy in housing security, "Residence has his house" is thought as the goal of housing security. For the lowest income class, the goal means that everyone has a house to live by renting or buying. Aiming to the low-middle income class, the goal in tax policy of housing security should be above the lowest one, which is "Residence has his own house" , and that is raising the rate of own housing.On the mechanism of tax policy in housing security, it works on housing-filter model. How to help the model operate smoothly is the role of the policy on the base of housing elevator consume. Almost all housing security policies can play their roles, but the tax preferential-subsidy treatment in housing filter model, I think, should be a good choice to provide security in present situation. Lots of conditions of the model are met in China, and reducing second-hand house price and increasing the income of residents through tax policy can make the model operate more smoothly. Elavator consume theory of house has been accepted in China, and tax policy and subsidy in housing filter model help low - middle income class obtain their own houses with minimum government expense cost.This mechanism is realized by affecting house price, determinable income and consumers' inclination. Imposing more duties on housing suppliers could bring about price going up, which will transfer tax burden to housing buyers. But how much will be transferred is determined by price elasticity of demand and supply. If the burden is easily transferred by raising price to the demanders, for the low-middle income class, the hope of owning house will come to nothing, and the goal of "Residence has his house" will not be realized. If there is tax preferential-subsidies on housing suppliers, the items in price will decrease on the situation of pricing on cost adding, which will increase the supply. The tax preference and mitigation are regarded as subsidies to the low-middle income class, which will improve demanders' purchasing power and demand inclination. When the great changes haven't taken place on the situation of demand and supply, housing preferencial-subsidies won't play its role, and it could make the situation more strained. So there is an important relation on the situationg of supply, besides of elasticity of demand and supply in the market.In China, the tax policy focuses on levying highly on second-hand house to regulate housing price and speculation. By positive analysis on the market and elasticity of new house and second-hand house, the conclusion is made that housing supply elasticity is sensitive and demand elasticity is positive. When the housing price rises, the demand goes up. Then the tax on housing supply will easily transfer on the demand, which will lead to the price growing faster.The tax preferential-subsidy plays the role on the housing demand by raising purchasing power. From macro-scopic and micro-scopic angle, this dissertation studies the relation of income and housing demand. The elasticity of middle and low-middle income class is strongest, lowest and high income classes are weak. For the high, the demand of housing is almost satisfied, and if more subsidies are provided, the adding income will be used in other things replacing in housing. So the scope of tax preferencial-subsidies should be restrained, then middle and low-middle income class should obtain more tax preferencial-subsidies.Now, the tax policy doesn't play the role well. The heavy tax policy on second-hand house adds the low-middle income class more burden. We could use the experience of another countries for reference, such as American, England Japan and so on. The measures for reform are put forward: decreasing deal tax; levying heavily on the second house by real estate tax on the base of free area; carrying out tax preferencial-subsidies on common house for low-middle income class, especially on the aspect individual income tax.Tax policy as an important housing security measure could make the housing filter model operate smoothly. But there are some problems rising when the preferencial-subsidies policy are carried out. The first, it will bring financial pressure on local government; the second, it will make tax system complicated; the third, the end of tax preferencial-subsidies is uncertain. These problems will make place for further research.In this dissertation, the hot problem of housing is studied. There are many literatures on housing, a lot of which based on sociology, from the prospective of housing choice, housing developer and so on. Of course, many researchers studied tax subsidy to housing, and there are also researches of housing filter model. But this dissertation combines tax policy with housing filter model, and probe how to employ tax preferencial-subsidy to make the model operate smoothly. This is one of the innovations on research perspective of this dissertation.The other innovation is the objective of tax policy in housing security, low-middle income class is the main objective of security; and "Residence has his own house" is the goal of tax policy in housing security.Another innovation is refected on the conclusion of positive analysis. By studying housing demand and price in sample cities, such as Beijing, Shanghai, Hangzhou, Wuhan, Chongqing, Chengdu, Lanzhou, we draw a conclusion that price elasticity of housing demand in the most of middle-big cities is positive, except for Beijing and Shanghai. When the influence of housing tax preference-subsidies on housing demand is studied, on macro-scopic scale, the conclusion is drew that housing demand of the middle income class is vigorous by analysizing the situation in the front-five, middle-five and behind-five area of urban average allocatable income. On micro-scopic scale, by analysizing the consumption of housing in different income class in Beijing, Shanghai, Hangzhou, Wuhan, Chongqing, Chengdu from 2000 to 2005, the conclusion is drew that the income elasticity of housing demand in middle income class is big, and the middle income class is the backbone force of housing demand. The conclusions of positive analysis illustrate that tax policy in housing security is feasible.