The paper examines changes in the Real Estate Tax System in China, it’s
development, current situation and discuss the possible impact on introducing the new real estate tax.
Table of Contents
1 Introduction
2 Development of Property Tax System in China
3 Possible Impact of Changes In the Real Estate Tax
Research Objectives and Topics
This paper examines the evolution and current structure of the real estate tax system in China, specifically addressing how taxation is utilized as a regulatory tool to mitigate speculative property bubbles and stabilize the housing market following the global financial crisis.
- Analysis of real estate market speculation in China.
- Examination of the existing multi-phase property taxation framework.
- Evaluation of government interventions to control property prices.
- Assessment of the trial programs for new real estate taxes in major cities.
- Investigation into the fiscal relationship between central and local government revenue.
Excerpt from the Book
1 Introduction
The recent financial crisis had an effect not only on the United States and Europe but on the whole world. China was not an exception. The crisis caused a dramatic increase of real estate prices in China over recent years. The reason was the desire to improve living standards by many Chinese citizens from one hand, and the investment opportunities and speculation from the other hand, with the large amounts of “hot money” flowing into the Chinese capital market.
Speculators were buying properties in order to invest their capital. Then, they are holding them without leasing or landing for a certain amount of time,. The idea is to create a shortage of supply on a market in order to earn from the increase of price on the real estate market. State Grid Corporation of China (Pheny & Wong, 2011) performed a survey in 660 cities and found that 65.4 million of residential properties had not consumed any electricity in the past six months. That shows the scale of the real estate investments. The source of increase of the property prices is too much money supply (Bin, 2011). Of course, the huge supply of money was necessary to rescue the economy during the global financial crisis of 2009-2010, but it has also driven speculation.
Summary of Chapters
1 Introduction: Provides an overview of the real estate market situation in China following the global financial crisis and introduces the government's motivation to use tax reforms to curb speculation.
2 Development of Property Tax System in China: Details the current complex structure of the Chinese tax system, explaining the division of taxes across development, transfer, holding, and tenancy stages.
3 Possible Impact of Changes In the Real Estate Tax: Discusses the introduction of experimental tax programs in cities like Shanghai and Chongqing and evaluates their potential effectiveness in balancing local government revenue needs with market stabilization.
Keywords
Real Estate Tax, China, Property Market, Speculation, Financial Crisis, Tax Reform, Land Grant Fee, Property Bubble, Fiscal Policy, Taxation System, Housing Prices, Local Government Revenue, Market Stabilization, Urban Land Use.
Frequently Asked Questions
What is the core focus of this research?
The research explores the Chinese real estate tax system and how it is being restructured to manage property price volatility and market speculation.
What are the central thematic fields?
Key themes include tax system complexity, the relationship between land ownership and taxation, government fiscal reliance on land sales, and the introduction of new property tax trials.
What is the primary objective of the work?
The goal is to understand how changes in the real estate tax system act as a tool for the Chinese government to protect the market from property bubbles.
Which scientific approach is utilized?
The work employs a descriptive analysis of the existing fiscal and tax framework, supported by empirical surveys and governmental policy reports from 2003 to 2011.
What topics are covered in the main body?
The main body covers the historical context of tax reforms, the specific stages of taxation (development, transfer, holding, tenancy), and the potential economic impacts of the newly introduced trial taxes.
Which keywords characterize this work?
Essential keywords include Real Estate Tax, Property Bubble, China, Tax Reform, and Fiscal Policy.
How does the ownership of land in China affect real estate taxation?
Because the state owns urban land, owners do not possess full property rights; therefore, taxpayers are defined as stakeholders in the development and holding process rather than as simple beneficiaries of public services.
What is the challenge regarding local government income?
Local governments often rely on land sales for revenue; introducing a unified property tax could reduce these land-based incomes, creating a fiscal conflict between central and local authorities.
- Quote paper
- Tomasz Wilczak (Author), 2011, Real Estate Tax in China, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/180219
