The Effect Of Real Estate Tax On Real Estate Market In China

Real estate taxes is an effective policy instrument for real estate market regulation and socio-economic resources distribution. It provides revenues for local governments, and plays a very important role in the entire tax system. Real estate taxes has become a important policy tool for real estate market macro-control, along with the implementation of land supply and finance policies in China.Firstly, this thesis discusses the change of the real estate tax policy how to change the transaction costs, expected benefits of real estate market and how to change the real estate business and decision-making behavior of buyers by changing the welfare of public expenditure. Ultimately the tax policy reaches regulation goals of the real estate market. The author really believes that estate taxes have impacted on the real estate market through such a mechanism.Secondly, this thesis finds that the real estate taxes has a significant effect on the real estate market through quantitative analysis using the data of real estate transactions, real estate prices, local public expenditure and real estate tax of 35 provinces (municipalities and autonomous regions) from 2001 to 2007. The system of real estate tax in China is not perfect and the collection enforcement is not enough. So the regulation effect of the real estate tax was not significant, certain types of taxes cannot play the desired effect.Just like that business tax does not have a significant effect on real estate prices; property tax, land value-added tax and income tax rates have a positive impact on the price of real estate.Finally, the reasons that led to the control limits were summarized, and the author came up with policy suggestions aiming at optimizing Chinese property taxation system.The author believes that reform of real estate tax system in needs to be strengthened in the following aspects: owning real estate tax, the levy of discriminatory taxes, at the same time, the income of the land transfer should be mixed into the real estate taxes, and real estate tax monitoring and enforcement also need to be optimized .