A Study On The Legislation Of Real Estate Tax In China

Real estate tax constitutes an important part of the new round of tax and fiscal reform. As the property tax and direct tax, firstly, real estate tax is fairer since the amount of tax depends on the value of the property which reflect the pay ability of the taxpayer; secondly, the burden can not be shifted, therefore, the taxpayer will pay more attention to their rights, through this the civic awareness of the citizen will be developed. Around the developed countries, real estate tax is the main source of revenue for local government.There are some problems existing in the real estate tax system, such as replacing taxes by charges, higher circulation tax compared to tax during the owning period,double taxation, unreasonable elements of the tax. With the development of real estate industry, the amount of tax relating to real estate is increasing rapidly. However, due to the land grant system, residential real estate is duty free in the period of holding,and one-time land-transferring fee constitutes the main source of local revenue. The mode of heavily relying on land-transferring fee for local government,which is called “land finance” will bring financial risk, considering the limited land supply. The future direction will be that, expanding the scope of real estate tax to residential housing and collecting uniform real estate tax. The aim of uniform real estate tax is as follows:straightening out the tax system of real estate,unifying the tax standard, reforming the land grant fee system and transforming administrative fees into taxes. Therefore, the essence of uniform real estate tax is to reform real estate tax and fee system, including the following measures: incorporating land-transferring fee into real estate tax,combining some kinds of real estate charges, coordinating some taxes in the phase of trading, combing the existing urban land use tax and house tax as real estate tax and expanding the scope of the tax. Among them, incorporating land-transferring fee into real estate tax is the key point. We should incorporate land-transferring fee not the whole income of land transfer into real estate. The developer should continue pay land development cost, resettlement fees and land transferring fee during the development period. After sale is completed, the buyer will pay real estate tax.We should formulate unified real estate tax law based on the following reasons:firstly,this is the requirement of the transformation of development mode; secondly,this is the requirement of deepening reforming of fiscal and taxation managementsystem; thirdly, it is the main component of the reformation of tax and fee system in real estate industry. The formulation of unified real estate tax is also feasible, relying on the pilot program in Shanghai and Chongqing, the history of collecting real estate tax on business housing, and the implementation of unified real estate registration system. Some principles should be followed in the process of real estate legislation,and detailed elements should be designed for real estate tax. The supporting measures of real estate tax including unified registration of real estate and the value appraisal system of real estate.The framework of the thesis is as follows, excluding the introduction and conclusion, the paper is organized by five parts:Part 1 is the basic theory of real estate. Real estate tax is mature in foreign countries, so there is plenty of research. This part introduces the concept,characteristics and the theoretical basis of real estate tax. The basis including public economics,property economics and science of economic law.Part 2 discusses the current situation of real estate tax and fee, the problems existed, the challenges faced by the real estate tax and fee and the suggestions for reforming. The existing system once played an important role in history. However,great challenges have been brought by the scarcity of land and the time of development mode transformation. We should take measures to change the situation.Part 3 discusses the necessity and the feasibility of real estate tax. The necessity of formulating uniform real estate tax is based on the following: requirement of the transformation of development mode; requirement of deepening reforming of fiscal and taxation management system; and the main content of reformation of real estate tax and fee. Pilot program in Shanghai and Chongqing, the history of collecting real estate tax on business housing, and the implementation of unified real estate registration system jointly make the uniform real estate tax feasible.Part 4 provides some suggestions for the legislation of real estate tax. The suggestions include both principles and specific elements of the tax. We think that the legislation of real estate tax should observe the following principles:tax principle of legality, principle tax of equity and tax principle of efficiency. As for the elements of the tax, we provide advice on subject of taxation, tax bearer, object of taxation, taxation basis, rate of the taxation, favorable tax treatment and tax administration measures.Part 5 introduces supplement measures of the legislation of real estate tax. As realestate tax has wide influence and there’s no tradition of collecting property tax in our country, the collecting of real estate tax is hard, we need to implement some fundamental systems. These systems include both unified registration of real estate and the value appraisal system of real estate.