Analysis On Effects Of Individual Housing Property Tax Levy On Housing Prices

In the21st century, China’s commercial housing prices showed a rapid rise. The prices in some top cities have been severely away from the actual purchasing power of residents. High prices affect both healthy and sustainable development of the national economy and the social equity and stability. In this regard, the government has issued a series of administrative and economic control measures. Promulgated the "Country eights" to increase housing supply and the cost of second-hand housing transaction tax in May2005. Introduced the "National6" that provides for ordinary residential proportion of new housing and increases the transaction costs of second-hand housing in May2006.The government raised to increase housing security, increase the first payments and interest rates of buying second houses by loans in August and September2007. However, these policies have not achieved the desired results. Then the government has strengthened regulatory efforts gradually and increased some regulatory means. On April17,2010, the State Council issued the "New National10", which is the most powerful and the richest of all the previous policies, then the prices rising trend has been initially curbed. On January26,2011,8real estate control policies and measures were made at the State Council executive meeting. The new "Country eights" requires strengthening differentiated housing credit policy. And for those who loan to buy the second houses, the first payment is not less than60%, the loan interest rate is more than1.1times of the benchmark rate. To further control prices, Shanghai and Chongqing began to levy the pilot individual housing property tax approved by the State Council from January28,2011, which opens the door of the pilot property tax levied on individual housing. After this, it’s proposed to expand the scope of the pilot, especially after the Third Plenary Session of the eighteenth on Nov.12,2013, which puts the property tax legislation on the agenda. But before the full implementation, it’s still necessary to try first. The reform will expand the pilot scope and intensity in2014, and its short-term goals aim to incremental housing. Though individual housing property tax proposed has attracted wide attention and discussion, its regulative effectiveness and impact still needs further research and discussion.Based on the analysis of the significance and the pilot policy, this paper analyzed the impact of individual housing property tax levy on housing price and finally puts forward relevant policy suggestions to improve individual housing property tax. In the theoretical analysis of the individual housing property tax:first, analyzed the impact on housing prices through supply and demand equilibrium model; next, analyzed the influence on housing prices of individual housing property tax through tax shifting model for short-term, medium-term and long-term; finally, use the four-quadrant model to analyze the dynamic effects of housing prices combining capital market with housing market after the individual housing property tax levy. Theoretical analysis shows, the individual housing property tax levy plays a role in improving the housing system and adjustment of housing supply and demand, and can suppress housing prices to some extent.In the empirical analysis of the individual housing property tax:first, to do the descriptive analysis on New commercial housing price index and New commercial classification price index of Shanghai and Chongqing, and analyze the trends after the tax levy; next, pick Shanghai as the object of the empirical analysis, and set Shanghai housing price index as the explanatory variables, and set GDP, SBC, CPI as arguments individual housing property tax as dummies to establish multiple regression model to do empirical analysis. The empirical analysis shows, the individual housing property tax has the negative correlation between the housing prices, but the actual effect is not obvious because it still has many kinds of problems to be improved.For the last part of this paper, based on the results of theoretical and empirical analysis, the writer will give some advice about programs of individual housing property tax levy, improve the individual housing property tax assessment system, including the legal basis, the scope of taxation, tax rate, waiver of preferential policies, tax purposes, supervision and management; establish the value of the property assessment system, including the establishment of specialized rating agencies, improve existing assessments professional staff levels, improve management and training mechanism for professional evaluators, dispute resolution mechanisms of assessment; accelerate the establishment of a unified registration system of real estate; promote national housing information networking.