The Effects Of Real Estate Taxes On Housing Price

The real estate industry is the basic industry of national economy and national economy can not develop without the development of the real estate market. In recent years, China’s real estate market develops very fast and the housing price continues to rise, even become the exuberance phenomenon of the real estate. In case of the real estate bubble, the government has repeatedly implemented macroeconomic policy regulation, including monetary policy and fiscal policy. As an important means of fiscal policy-the real estate tax policy in the government’s macro-control has an irreplaceable role. The real estate tax is an important economic lever to intervene the real estate price and promote the real estate market to balance. It plays an important role to guide the efficient allocation of real estate resources. Because of the exuberance of the real estate market, the Government has repeatedly used the real estate tax policy to regulate the real estate market, but had little effect. How does the real estate taxes affecting housing price and how does the real estate taxes reform affect housing price efficiently has become a hot topic in academic.Firstly, this paper explains the existing property tax system fully and reveals the flaws of the current real estate tax, and then explains the need for property tax reform. Secondly, in theoretical research, the paper used the model of tax shifting and the model of asset price to study the relationship between real estate tax and housing price. In tax-shifting research, the paper analyzed the effects of real estate tax on housing market supply and demand and the effects of real estate tax on housing price in different conditions of supply and demand price elasticity. In asset price research, the effects of real estate holding tax and transaction tax on housing price were analyzed in the sequence of discrete time and continuous time series. Thirdly, in empirical research, the country’s 31 provinces (municipalities and autonomous regions) panel data in 1999-2010 year were employed to study the relationship between the real estate taxes and housing price in the general analysis perspective and consumer demand perspective. In the general analysis perspective, the net effect on the price of real estate taxes considered in the whole market point of view. In view of consumer demand, not only worry about the real estate taxes effects on house prices, but also local public expenditure effects was considered. By this study, the main conclusions go as follows: The China’s real estate taxes had negative effect on housing price in all, but individual tax has a positive effect on housing price;The effects of real estate taxes on housing price are regional differently and the effects in eastern is first, followed by central region and western;Increase local public expenditure will weaken the negative effect of the real estate taxes on housing price.Finally, based on theoretical analysis and empirical results, government’s tax policy and tax reform proposal were given.