The Effect Of China’s Housing Property Tax On Housing Price

Housing property tax has always been an important tool for a country to regulate the real estate market and social distribution.It is a considerable means for local governments to obtain fiscal revenue,and it plays an important role in the entire tax system.After the implementation of combination of policies including land and finance,the use of taxation is becoming the focus of macroeconomic regulation and control to further strengthen the effect in China’s real estate market.This research is divided into seven parts:literature review,historical evolution process,theoretical research,empirical test,dynamic analysis,international experience and policy suggestions.The literature review systematically summarizes the theoretical research progress on the impact of housing property tax on housing prices.The historical evolution and present situation section analyzes the historical background of housing property tax reform throughout ancient,modern ages and the time after the foundation of People’s Republic of China,and studies the motivation of housing property tax reform.The theoretical research part is carried out through two dimensions:general theoretical analysis and land finance perspective,respectively using theoretical models to study the impact of housing property tax on housing prices.The empirical section analyzes the impact of housing property tax on housing prices through PSM methods,using data from two cities,Shanghai and Chongqing.In the dynamic analysis part,we use the dynamic stochastic general equilibrium model to explain the impact of housing property tax on housing prices,and do a simulation experiment.The international experience section summarizes the housing property tax system in the United States,Japan,Germany and Singapore provides an important reference for policy suggestion.The conclusions obtained in this paper are as follows:(1)In theory,under the conditions of China’s special land system and urbanization stage,there is a mutual promotion between land finance,land price and house price.The housing property tax can not fundamentally cut off the internal relationship between the three,and the impact on housing prices will be limited;(2)From the empirical results,the property tax can not restrain the rise of housing prices,and the ability to regulate housing prices is limited;Housing property tax can not reduce the land transfer price,nor can it replace the role of land finance;(3)Housing property tax levy is expected to increase labor supply,investment,and GDP in a short period of time;(4)Rising government spending will bring the overall rise in land prices,housing prices and land supply.Government spending has squeezed out consumption but increased total social investment;(5)The increase in land fiscal pressure has led to a decline in land prices and house prices;(6)Under different conditions,the effect of housing property tax on housing prices is obviously different.The effect depends on the characteristics of the real estate market,the stage of development,the setting of property tax and the elasticity of adjustment.The housing property tax should implement the system of broad tax base,low tax rate and few tax categories.The tax basis should be based on market assessment value,the tax rate should be set according to the principle of differentiation,and the conditions for tax relief should be set.Property tax is an important tax in all countries,which generally belongs to local governments at all levels and is an important source of finance and taxation to provide public services.In view of the characteristics of housing property tax,this paper proposes the path choice of China’s housing property tax reform.In terms of functional positioning,the housing property tax reform has two objectives:First,it should be to adjust housing prices,let the house return to the essence of "residence";second,rationalize the financial relationship between the central and local governments.The difficulties in China’s housing property tax reform mainly focus on issues such as land,housing property rights,tax burden structure,tax collection and management,and the initiative of local government reform.The housing property tax reform should abide by the principle of fairness and neutrality.The design of the scheme can be divided into three phases:short-term,medium-term and long-term.The levy model should choose the combined taxation of land and real estate.The taxation basis is based on the market evaluation value of the real estate.The tax rate needs to take into account various factors such as the tax base,the taxpayer’s tax burden,the local government’s financial needs,and the higher-level government transfer payments.Regarding the decision-making power of the tax rate,the central government determines the floating range of the tax rate,and the local government determines the actual applicable tax rate in the region according to factors such as the economic development level of the region,the real estate market conditions,the scale of the tax base,the affordability of taxpayers,and the annual budget of the local government.In terms of the allocation of tax power,the central government is responsible for the basic legislation of housing property tax,formulating evaluation criteria,providing technical support for evaluation;while the provincial governments are responsible for formulating implementation rules,determining tax rates,and assessing the real estate value of each jurisdiction;The county governmentsare responsible for collecting housing property taxes and providing public services in accordance with the principle of benefit.In order to ensure the implementation of the housing property tax reform,the government needs to start from the following aspects.First,establish and improve laws and regulations related to housing property tax,so that housing property tax can be legally compliant;second,Local government’s housing property tax policy should match local public expenditure budget policy as far as possible;the third is to gradually improve the local government fiscal revenue structure while implementing the housing property tax reform,thereby curbing the excessive rise in housing prices;fourth,formulating different housing property taxes based on regional differences in housing prices;fifth is to establish a housing assessment system and improve the collection and management system.The last is to establish a unified housing registration system,squeeze out speculative demand,which is conducive to regulating housing prices.