Discussion On The Tax Issues Of Real Estate Appraisal

In recent years, with the prosperity and development of China's economy and society, the rapid growth of real estate industry has become an important part in the composition of China's national economy and contributed great power to GDP growth. The prices of real estate are able to reflect economic and social development and guide the direction of economic development in a timely manner. Therefore, real estate appraisal(REA) emerging with the rise of the real estate industry becomes especially critical in the development of national economy.In the present REA practice, three kinds of basic appraisal methods are the most commonly used: market comparison method, income method and cost method(assetbased method). These three methods exist independently, but also complement each other. They form a complete set of REA systems in constant improvement. When using market comparison method and income method for REA, due to the inherent characteristics of these two methods, appreciation or depreciation incurred by the appraised real estate value doesn't require treating tax burden. When using cost method(asset-based method) for REA, however, you need to consider whether you need to treat relevant tax burden, in the face of assets appreciation or depreciation.In the current REA practice, as the value types of appraised assets are not unified, it is impossible to define assets value as market value when using cost method(asset-based method), which leads to the absence of relevant tax burden treatment of assets appreciation or depreciation and finally affects the results of REA and use of appraisal report. This kind of problem is very common in assets appraisal industry, and also a controversial one.With the soar of real estate prices in recent years, in assets appraisal, the appreciation of real estate enterprises and other enterprises involved in real estate industry is large. Whether and how the resulting related tax burden is treated will directly affect the appraisal results. To solve this problem, on summarizing the development history and relevant findings in domestic and foreign REA research, as well as briefing REA concepts, including value types and basic appraisal methods of REA, combined with the performance of value-added tax and income tax in REA, the present study concludes and analyzes tax burden issues and treatment methods of three types of real estate in REA and elaborates on tax-related issues in REA, such as tax issues brought about by real estate appreciation and equity transfer in real estate development enterprises, according to the status quo of China's REA and experience summary in REA practice. And then, through frequent scenarios in two appraisal practices, it illustrates tax-related problems in previously proposed REA and probes into relevant solutions. Finally, it draws a conclusion based on the above studies, presents improvements for existing problems in REA and looks far into the application of tax-related issue treatment methods in REA in the future REA practice.