Effects Of Property Tax Reform On The Local Finance In China

Nowadays, there are problems in the system of property related local financial income.On one hand, the property tax system structure and the management are irrational and overalltax revenue is low. On the other hand, deformity land financial policy incentives localgovernments to sale large-scale unreasonable land, which leads significant amounts ofrevenue, land to inefficiency and domestic high real estate prices. Therefore, the reform of theexisting property tax system is very necessary since it can provide stable and sufficient sourceof income for the local financial and guide scientific and healthy development of the realestate industry. In recent years, the development of domestic real estate tax reform andsubstantial progress has been slow, mainly due to resistance from local governments. Propertytax reform will lead to the autonomy of local government revenue and expenditure of the landreduce the enthusiasm of the local government. This paper will analyze the amount of incomeby estimating property tax revenue reform, measuring the size of the reform of property taxrevenue of local governments’ gap to illustrate the prospects of China’s real estate tax reform.This paper theoretically starts with the design of property tax reform program and thenbuilds a specific property tax calculation model. Empirical Methods uses excel data analysis,which is simpler than traditional measurement software, to build a regression equation anddata predicted. It turns out in the early stage, property tax reform will give local finance alarger gap, but compared to the overall local revenue, this gap is acceptable. After theproperty tax reform is mature and stable, property tax revenue will grow in a large sale, andcan be a sufficient and stable good source of revenue for local governments in replacement ofunreformed land. Thus, the advantages outweigh the disadvantages of property tax reform,with feasible conditions. Finally, for the early stages of reform，I advice local property bondsfor financial compensation. For the sufficient income brought by tax real estate, it isrecommended to be invested in local public education.