Research Of Land Financial Impact On Real Estate Development

Tax Reform in 1994 had reduced the income of the local government, but it didn’t reduce the responsibility of the spending of the local government. To solve the problem, local governments balanced their finance by the increasing price of land and taxes from the industry of the real estate and the relevant industries, then land finance come out. Because the real estate industry has a high correlation with many other industries, its development becomes a very important role in promoting China’s economy. Many scholars believe that it’s land finance that brings the boom of real estate, because the land finance and the development of real estate industry showed a symbiotic relationship. How much and how land finance influenced the development of real estate, is very worth to study deeply. In the critical stage of economic transformation of China, in order to achieve the transformation and upgrading of industrial structure and promote the sustainable development of the national economy, we have to correctly handle the relationship between land finance and the development of real estate. Through deepening the reform of related systems, we can promote the healthy development of the real estate industry.Previous studies mostly are about the influence on economic growth by the real estate, the problems in the development of the real estate, rarely analyzed how land finance influenced the real estate. Many scholars studied the influence between the land finance and the real estate from just one aspect, for example, many scholars analyzed that land finance influenced the price of real estate through land price and the effect of the whole land finance, and some others analyzed the bad influence on the development of real estate from land finance. The results of those researches have laid the research foundation for our further discussion on this issue, and the problem of the analysis also has become the focus of our further study.Based on the analysis of the research of the predecessors, first, I study the concept, evolution and contents of land finance. In this paper, land finance mainly refers to a set of relatively independent financial revenue and expenditure activity and interest distribution system, which is to meet the local public expenditure and public investment through the transfer of land and other activities related to the acquisition of land assets income. Since the reform of tax system in 1994, land finance began to rise. Land finance mainly includes the land assets income, land related tax income and the land finance income. After 20 years of the land finance, the size of the land finance increases rapidly, and becomes more and more large.Secondly, through the research on the relationship between land finance and real estate development, this paper clarifies the intrinsic influence mechanism of land finance on real estate development. Land finance mainly influences the development of real estate by increasing the income related to the land, limiting the effective supply of land and influencing the expect of real estate. As the composite investment goods, real estate can be investment goods. The local government’s support of real estate have largely pushed the development of real estate as an investment good.Then, I conduct an empirical analysis on the influence of land finance on the real estate. Firstly, by doing a descriptive statistical analysis of the development of the real estate, I found that the real estate really got rapid development in the past ten years. Then through the statistical test of the real estate development, we selected seven representative of the real estate development. As for the land finance, I selected the land revenue and related tax income. By modelling the relationship between land finance and the development of the real estate by SEM in Beijing, I found that land finance has a very important influence on the development of real estate, which confirms the results of previous studies and analysis. At the same time, on the basis of the above research, this paper selects the ratio of housing pricing to income, the ratio of real estate industry contributing to GDP, and the ratio of domestic loan of real estate to the loans of all financial institutions, which represents the healthy development of real estate, and I analysis the relationship between the land finance and the health of real estate by path analysis, and the output confirms that land finance really has a very important effect on the health of real estate.Finally, I put forward the countermeasure proposal of reforming the related institutions to promote the development of real estate. The result of the empirical test shows that land finance has a negative impact on the health of real estate. So, we must deepen the reform of land finance and the related systems, in order to promote the healthy development of real estate. First, we need to reform land system. Reform land system in urban and rural areas, protect land property rights of farmers; promote the transfer of land using rights, and improve the market of land use rights; reform the land expropriation system, regulate the land requisition of local government. Second, we need to deepen the reform of the taxation system. The focus of reforming the taxation system is to match the income right and responsibility of local government, and to change the attitude of land finance. Third, we need to change the performance evaluation system. Change the performance evaluation system of GDP. With the rapid development of the economy at the same time, we need to care about the quality of economic growth, establishing environmental-friendly economic developing model. Fourth, we need to strengthen the construction of affordable housing. We need to strengthen the construction of affordable housing through improving the housing security system, standardize the construction of affordable housing, improving the management of affordable housing, and to improve the utilization efficiency of affordable housing.