Local Financial Dependency Problems Of The Real Estate Industry

In recent years,there has been a lot about real estate kidnapped the Chinese local government’s remarks. In fact, behind this rhetoric is that people over-reliance on local finance real estate concerns.However, what a degree dose local financial dependence on the real estate industry in, and what impact does this will brings, what measures we should take, in existing studies failed to give the answer.According to the data of2012,if the real estate downturn the local governments will have serious problems.Many local governments even ask real estate developers for help.expect developers to take land development investment.It shows that the local financial dependence on the real estate industry has been very serious and it is the current pressing issues need to be resolved.A regional financial sources and income situation for the region’s social, economic, and social welfare of all residents are closely related.Thus,this article on the local financial dependence on the real estate situation in-depth study of practical significance.In this paper, after the reform of local government revenue-sharing behavior perspective, exploring the local financial dependence on real estate issues.Content of this study are as follows,the first part is an introduction, introduces the research background, significance, review relevant theory and research methods.The second part of the article describes reform background, basic content and reform of the tax impact on local finances of the tax system. We can found after the reform of the tax system, local finance balance changes to fiscal imbalance, the local government is facing a huge financial pressure.In the third part, the paper describes the local financial dependence on the operating mechanism of the real estate industry, reform the tax system where local government fiscal dilemma facing tremendous pressure, and the rapid development of the real estate industry has become a pillar industry in China.It shows that real estate development and local fiscal revenue is significantly related to the real estate development. Not only the local government brought great general budget tax income, but also through the development of the land market is driven by the local government to bring huge extra-budgetary revenue of the land.The study confirmed that the local financial has dependent on the real estate industry seriously.And through the local real estate tax revenue and land revenue and local revenue accounted quantitative measure of the ratio of the30provinces, municipalities and autonomous regions and local financial dependence on the real estate industry. We can find local financial dependence on the real estate industry for the highest degree of Zhejiang province, Shanxi Province is the lowest degree of dependence.In the fourth part, the paper carried out a detailed analysis about the reason why local government dependent on the local real estate finance based on the behavior of local government, the tax-sharing reform local government is facing tremendous pressure, incentive incompatibility of performance evaluation system and so is the local fiscal path. The fifth part, according to the reasons why local fiscal is dependent on the real estate industry, the article proposed following suggestions for breaking local over-reliance on real estate fmance,a reform to the taxation system, a reasonable division of property rights and powers to improve local government performance evaluation system in order to build public service-oriented government, accelerate the transformation functions.