The Economic Analysis Of Real Estate Tax Reform In China

In January28.2011, property tax reform started in Shanghai and Chongqing. The property tax. reform accompanied by the "National10" is considered by most people to cool the property market, curb high price and prevent the formation of a property bubble. Many scholars believe that the main purpose of property tax reform is to create conditions for China’s local governments to gain a stable financial income, but not to curb high price. Of course, there are many people opposing the levy of property tax.This paper attempts to analyze the inadequacies of China’s real estate tax system, the necessity of China’s real estate tax reform through the analysis of practical experience of the traditional theory of the real estate tax, as well as typical countries and regions in the real estate tax and to go a step further, propose concrete suggestions for actions in China’s national conditions. In addition, though the property tax reform was carried in Shanghai and Chongqing, reform measures should be tested by practice. I want to find the reform initiatives to be improved at the new problems in the reform process and seek to improve the measures and methods to solve new problems according to the present practice of the pilot cities.The paper is divided into six parts, the first two parts clear real estate tax exists as property tax by combing the literature relating to real estate tax system and the main theory and analysis in the real estate tax; and its main function is showed in three aspects:provide a stable revenue for local governments; regulate income distribution to narrow the income gap and promote social justice; optimize the real estate market in resource configuration.The third part mainly tries to find some revelation of the real estate tax reform in China through the analysis of typical national and regional experience in the real estate tax. It is found that, in the U.S., Hong Kong and Taiwan, the main reason for countries to choose different real estate tax is a different land system. If the land can be completely private, the main structure of the real estate tax consists of real estate tax, the land value increment tax and income tax; if the land is not completely private, the main structure of the real estate tax is made up of the land rent, house tax and income tax. In addition, some common characteristics can be found in the international experience of the real estate tax system. Firstly, the basic principles of "wide tax base, less taxes, low tax rates and stricter tax collection" secondly, tax system is designed to think highly of maintaining but think little of circulation; thirdly, the real estate tax is a major tax for local government, and at last, it has perfect value assessment system.The fourth part analyzes the current real estate tax system of our country and compares it with the real estate tax practice in developed countries and regions in order to identify the main problems of our current real estate tax system. These issues directly affect the normal function of China’s real estate tax, weaken the function of raising local revenue of real estate taxes, make it difficult to play the function of regulating the distribution of income and failure to optimize the allocation of resources of the real estate market.The fifth part is to analyze the situation of Shanghai and Chongqing property tax reform in order to identify the defects of the reform initiatives. Property tax reform in Shanghai and Chongqing was officially placed two purposes:firstly, rationally regulate income distribution and promote social justice; secondly, guide residents in reasonable housing consumption and promote economical and intensive land use. In private, there are not only dissenting voice, but also some approving viewpoints that property tax reform can suppress the high prices.The sixth section presents the basic principles and suggestions of our country’s real estate tax reform. The reform should follow the principles of tax fairness, tax efficiency and macro-control, and it concludes the reform in tax entity and related measures. The substantive aspects include:first, change the land transfer for land rent; second, assess the value of changed housing and set it as the tax basis; third, cancel the urban land use tax, arable land occupation tax, land value increment tax, and Stamp Duty; fourth, expand the scope of taxation of real estate tax gradually; fifth, implement a progressive tax rate; sixth, normalized to sales tax or income tax all income and property related to real estate. The related measures include:firstly, improve the real estate tax legislation; secondly, improve the real estate property registration system; thirdly, improve real estate appraisal system.The innovation of this article may include:firstly, this article closely grasps the nature that real estate tax is a property tax, and on the basis of this, indicate that the reason why different countries choose different property tax system is their different land ownership and this is the social and economic reasons for different real estate tax; second, the paper points out that in the core of China’s real estate tax reform is to change the mode of land transfer, because it makes the real estate tax, land value increment tax, urban land use tax levy become embarrassing and partly unreasonable. Change the land transfer for the land rent not only makes the levy of property taxes reasonable and operable, but also makes the land value-added in a timely manner to value; what’s more, it not only simplifies the tax, avoids double taxation, but also contributes the function what the current land value increment tax and urban land use tax are expected to realize to achieve.