The Impact Of Real Estate Tax Upon Housing Price

Since the basic canceling of housing benefit distribution system, which at the end of1999, the market-leading housing system has began to take shape and gradually tend to be improved. This drives the rapid development of the real estate market, the real estate industry has grown to become the basic industries and pillar industries of the national economy. However, behind the boom in the real estate market, the continuous rising of price has exceeded housing affordability of the residents, and the problems of buying house are more and more difficult. To curb the fast rising of housing price, the government had repeatedly implemented macro-economic measures to regulate the real estate market, including the monetary, fiscal, land supply policy. They are effectively inhibition of the fast rising housing price, but also caused substantial fluctuations in the real estate market. The real estate tax reform plays an irreplaceable role in the government’s macro-control as an important means of fiscal policies. Accordingly, the analysis of the effection of the real estate tax rates to housing price, which can effectively play the role of the real estate tax in the macro-control, is the focus of this study and the key issues to be solved.Starting from the analysis of the theoretical framework of Tobin’s Q, this paper use the panel data model as the empirical test, explore the impact of the real estate tax on the house price. The theoretical model shows that, whether from the perspective of investors or consumers, the real estate tax impacts on the house price are negative, that is the real estate tax can stabilize the rising of house price. The empirical results show that the higher real estate tax will lead to the decline in housing prices generally. In the long-term, the relationship of real estate tax effect on the housing price is presented U type, and is currently in the downward phase of the U type line. Further analysis revealed that, the effects of real estate tax on housing price are regional differently, and the most significant effect is eastern, followed by central region and western. At the same time, in the real estate taxes, property tax, land appreciation tax and farmland occupation tax have the significant negative impacts on the housing price; urban land using tax and deed tax have the positive effects on the housing price, and there are big differences between the various regions. Finally, based on theoretical analysis and empirical tests, we will give the appropriate policy recommendations.