Effects Of Real Estate Tax Policy On Real Estate Prices

The real estate industry is the foundation of the national economic development, thedevelopment of the real estate industry can drive the development of the national economy.China’s real estate market has developed rapidly in recent years, rising house price, even appearexcessive real estate boom phenomenon. Based on the concerns of the real estate market bubble,the government has promulgated relevant policies, including monetary and fiscal policy, tomacro-control of the real estate market. As an important fiscal policy, real estate tax plays animportant role in intervening house prices, promoting the balanced development of the real estatemarket, guiding the real estate resources optimization configuration. So the real estate tax policyhas an irreplaceable role in the government macroeconomic regulation and control policy. Asgovernment release relevant real estate tax policy, the relationship between real estate tax policyand real estate price has gradually become a hot academic research. So what is the mechanism ofreal estate taxes affecting house price? How is the real estate tax in every stages of real estatemarket effects housing price? How does the implemented real estate policy affect housing price?This article will analyze the above problems from the perspective of qualitative and quantitative.Then From the perspective of government and enterprise, we put forward some policy suggestionsfor the reform direction of real estate tax system in China, and some coping strategies are givenfor real estate enterprise to face the macro regulation and control policy.At first, this paper defines real estate prices, property tax and other related research conceptsand fully describes taxes that people require to pay in different stages of the real estate operation.Secondly according to the tax end-result theory and asset pricing theory model to study themechanism the relationship between property tax and real estate prices. In tax shifting andincidence theory, the real estate operation is divided into development, transfer, possession threestages. The paper uses the partial equilibrium analysis of economy to study the effects of differentstage tax on housing price. In asset pricing theory model, the effect of real estate transaction taxand holding tax on house price were discussed in the series of discrete time and continuous timeseries. Then based on the above two theory model, combined with Chongqing real estate taxpractice and real estate market conditions, the paper analyze of real estate tax policy influence onhouse prices using time series data. In the empirical analysis, we first built1996-2011years timeseries model, which was use to research the supply and demand elasticity of Chongqingcommercial housing. In recent years, the real estate tax policy concentrates on the transfer phase,so this paper study mainly on the real estate transfer phase. In the real estate transfer phase, we useunit root test, co-integration analysis, error correction model and Granger causality test to analyzethe effects of1996-2011year Chongqing City real estate tax policy on the housing price. ThenChongqing’s second-hand housing market data was employed to comparatively study therelationship between the real estate taxes and house price. As Chongqing is one of the pilot forhouse property tax in China, in possession phase this paper apply dummy variable model toexplore the impact of property tax on housing prices. Through the above analysis, main researchconclusions go as follows: In recent years the real estate tax policies did not achieve the desiredeffect.(1) According to the analysis, we found that Chongqing’s commercial housing supply is moreelastic and its demand is inelastic, which show that commercial housing demand in Chongqing isrigid. If the government intensifies real estate tax revenue, the tax burden on real estate providers will increase nominally. Actually this measure increases the tax burden of true risk-taker orhousing residents and promotes further price increases(2)The analysis of real estate transfer tax policy shows that whether short-term or long-termchange of real estate tax is not the granger cause of the change of the prices Based on the analysisof second-hand housing market, we found that the real estate tax policy in the short term can curbspeculative buying investment demand by increasing transaction costs, but in the long time taxwill be easily pass onto the property buyers. So it is difficult for typical real estate tax policies tocurb rising house prices.(3) Levying property tax in possession phase may increase the maintain cost of housing,which can optimize the structure of commercial housing market and crack down speculativedemand. but because of the rigid demand for housing, real estate tax can’t guide the pricesreasonable return.Finally, based on the theoretical analysis and empirical results, we will give somecorresponding recommendations of China’s real estate tax system reform and some strategysuggestion will be given for real estate companies to face real estate tax policy.