Property Tax Reform In China

In recent years, the rising housing price has become an unprecedented hot issue. The rise of speculative investment of the real estate market results in the soaring housing prices. Speculative real estate investors obtain benefits by taking advantages of the state policies that on the one hand self-use houses of residents and unsold houses of real estate developers are subject to exemption from house property taxes; on the other hand, the gains from investment or speculation on housing are free of income taxes. This, to some extent, aggravates the gap between the poor and the rich in China and the increasingly unfair distribution of wealth. In view of the social impact of the soaring housing prices, the fundamental reason lies in the defects of the house property tax system. By introducing the current status of house property tax system, this paper analyzes the problems of the current house property tax system and the content of the house property tax reform, puts forward some suggestions against the problems and analyzes the impacts of house property tax reform.This paper first introduces the definition, nature, characteristics and historical evolution of house property taxes. By describing the concept of house property tax and property taxes and the relations to real estate tax, this paper analyzes the aims of charging house property tax and property tax and the corresponding conditions in different countries and regions, from which summarizing the pros and cons. Based on the analysis, the paper illuminates the fundamental environment and policy objective of house property tax in China and concludes that the levy of house property tax is feasible for China's current national conditions. Secondly, it introduces the contents of house property tax reform and highlights the problems of house property taxes in China. Combined with the development history of real estate industry and the existing contradictions in current real estate market, this paper studies the implementation of supporting measures of the house property taxes. It penetratively analyzes the situations of house property tax system in China confronted by the tax base, calculation base, tax structure and tax supporting measures by demonstrating the existing tax system in China's real estate industry and relevant theories. In view of the existing situation, the policy background of the levy of house property tax is analyzed. Three suggestions are proposed accordingly, namely, first to expand the scope of taxation on property, unify the tax calculation bases, implement differential proportional tax rate and improve the supporting measures; second to improve the property registration system, strengthen the collection and administration of property tax and reform the irrational elements in the existing property tax system; third to make suggestions to the reform of house property tax. Thirdly, through the analysis and comparison of house property tax collection mode and characteristics in the US, Hong Kong and the UK, it concludes successful experiences for China's house property tax collection. And therefore provide proposal for the house property tax reform. From the study of the property market control in Shanghai, it concludes that it is essential to make multi-facet adjustment in land, tax, credit and other areas, to promote the construction of indemnificatory housing, to firmly promote the development of real estate industry and to establish and improve the long-term mechanism of house property tax control. Finally, this paper demonstrates the impacts of house property tax in the angle of ensuring the local fiscal revenues, narrowing the gap between the poor and the rich and speeding up the urbanization.