Policy Design And Tax Effects Of Property Tax Levy

The real estate industry is one of the important pillars of China's national economy, and the real estate tax reform is one of the important issues which has been concerned by the government. After several taxation system simplifications, China's real estate tax system has been reformed to a certain degree. But still, there are several problems in it as followings: tax burden in holding-area is not enough; taxable basis is irrational; tax rate is fixed; the tax scope is too narrow; the local enterprises and the foreign enterprises have different tax systems and so on. These all are not fit for the Efficient, Fair, and Financial principles. In "The decision on the improvement of the market economic system by The CPC Central Committee" (published by The Third Plenum of the 16th CPC), it clearly states that:Reform the urban construction tax system. Set a standardized real estate property tax when conditions are ripe for, and corresponding abolition of the fees.The existing problems in the real estate taxation system are analyzed by using the theory-and-practice-combining method in this paper. And the need for the introduction of property tax is discussed on the public economics viewpoint. After drawing lessons from the foreign countries' and Hong Kang's and Taiwan's property tax systems; Using the public policy decision-making theory, and analyzing the tax system elements, legislation model, the tax right division and financial status, the author devises a property tax system that in line with China's national conditions. Base on above, five real estate enterprises in Xi'an as example are conducted, the author analyzes the impact of house prices with the property tax on and the supply and demand model. At the same time, using the assume-levy-on method, the author calculates the property tax burden to taxpayers and the tax rate, which provide reference basis for China's real estate tax reform.