Research On China’s Real Estate Tax System Reform

In recent years, the boom of real estate effectively promoted the rapid growth of upstream and downstream industries that concerned real estate, stimulating the fast development of China’s economy. With the development of the real estate market,the ratio of the real estate investment on the total social investment is too high which serious squeeze the other economic expenditure, reduce the effective allocation of social resources and damage the balanced development of industry.The overheated real estate market and high prices have had a significant negative impact on the economic development of our country which has seriously hindered the market economy healthy operation and economic transformation, delaying the process of China’s urbanization. From the aspects of fiscal revenue and industrial economy, the single industrial structure may easily cause the imbalance development of other industrial structure and lead to the fracture of the whole industrial chain with slightly careless,finally bringing economic depression. Besides, the rapid development of real estate and the deformity of high prices not only affect the process of China’s urbanization,but also lead directly to the huge deficit problem hided behind local land finance.In addition,the continued rising housing prices has already seriously affected the quality of housing level of residents in our country. In order to control prices, the government has taken a series of measures such as real estate credit, professional certification and so on to curb higher prices, but the effect is quite small. Now, more domestic scholars place more attention on the relationship between housing prices and a new round of real estate tax system,hoping to control prices through the design of new real estate tax system to achieve the real estate resources allocation optimization. And on the January28th,2011, Shanghai and Chongqing have carried out the housing property tax pilot reform, but the effect is not ideal.Otherwise, in2009, the transformation of business tax into the value added tax has been piloted in Shanghai which means it’s necessary for the local government to speed up the fostering of new main taxes to increase local fiscal revenue,so we focus more our attention on the real estate tax reform. But what is the exact relationship between real estate tax and the economy? What problems do exist in the existing real estate tax system and what is the reform risk? How to design a new real estate tax system so that make it become a stable and reliable source of local fiscal revenue? This thesis attempts to explore and answer these questions. This thesis mainly contains five parts including introduction,the mechanism of real estate tax on the regulation of the economy, the problems existed in China’s real estate tax system and difficulties of reform, other countries (regions) real estate tax experience and suggestions to improve the real estate tax system of our country. The introduction mainly expounds the research on the real estate tax system reform from both domestic and foreign scholars. Mechanism of real estate tax on regulation of the economy mainly states the impact of real estate tax on social investment, household consumption expenditure and housing prices. Problems existed in China’s real estate tax system and difficulties of reform comprehensively analyzes existing problems in the current real estate tax system in our country and the difficulties facing the real estate tax reform. The fourth part--other countries (regions) real estate tax experience mainly analyzes real estate tax system of American, Germany, South Korea and Hongkong and derive their experience for reference to further perfect the real estate tax reform.The fifth part--suggestions to improve the real estate tax system of our country mainly elaborates the design of the tax system, collection and supporting measures in order to ensure the success of real estate tax system reform.We obtain the following conclusions through the study:(1) Real estate tax and house prices were negative correlation in theory, but the actual situation of Shanghai and Chongqing does not match with the theoretical analysis;(2) To deal well with the relationship of main stakeholders behind the real estate tax reform and local implicit fiscal deficit problem is the necessary condition for success of real estate tax reform;(3) To ensure the smooth process and efficient opreation of real estate tax reform not only need to reform the real estate tax system itself,but also need other measures at the same time.The suggestions are as follows:(1) The land-transferring fees, land value increment tax, tax on using urban land and farmland occupancy tax and the existing real estate tax should merge into a new real estate tax;(2) It’s necessary to strengthen the construction of real estate evaluation team, enhance the comprehensive assessment level and gradually transform the real estate tax basis from the market price to the real estate net assessment value; (3) In the long run, the central government can delegate real estate tax right to local government.The local government determine the real estate tax rate and exemption area to realize the fair taxation and effective regulation of the economy;(4) It should improve the real estate evaluation mechanism and the real estate registration system, perfect the networking among household registration system, personal credit system and the real name system, and separate tax collection and real estate evaluation system, so as to ensure success of the real estate tax reform;(5) It should strengthen the supervision of the real estate market, transparent the real estate transactions and promote the effective operation of the real estate market;(6) It should increase the transfer payments of the central to local to offset finance income shocks brought by the initial real estate tax reform and thus ensure that the enthusiasm of real estate tax reform for local government.