China considers property tax legislation

A new property tax law draft is expected to be submitted to the National People's Congress (NPC) for deliberation in 2017, Beijing-based Legal Daily reported.

According to Hao Ruyu, an NPC Standing Committee member, the drafting process had already begun in July. The Standing Committee of the NPC, China's top legislature, included the law in a legislation plan released in August 2015.

The absence of a property registration system in China is an obstacle in introducing property tax, said Shi Zhengwen, deputy director of the Chinese Association for Fiscal and Tax Law, in an interview with Legal Daily. Shi is also a professor of fiscal and tax law at China University of Political Science and Law.

Shi's opinion was echoed by Feng Qiaobin, a professor of public finance at the Chinese Academy of Governance. Feng said that China needs to have unified property registration in all cities and counties, and that a unified property registration system should be introduced nationwide.

Following the lead of dozens of cities in China, the Shanghai municipal government has implemented a unified real estate registration system across the city. The city's government also ceased issuing property ownership certificates starting Oct. 8, Global Times reported.

Although citizens around China hope property tax can help to curb speculation and the rise of housing prices, Liu Jianwen, a professor at Peking University Law School, said that the tax will mainly help to optimize local tax systems and local fiscal revenue. It will also adjust income distribution, according to Liu.

China aims to achieve unified property registration in all cities and counties by the end of this year, Xinhua News Agency reported. A total of 21 cities around China have released newly tightened measures for home purchases since Sept. 30, all aimed at cooling down the market.

Feng said it will be difficult to introduce the property tax in 2017; however, he predicts that it will be introduced by 2020.