The introduction of property tax strategy to consider

Published: 3 Jun 2009 03:31:12

Network of the Chinese government published "The State Council Development and Reform Commission approved in 2009 on the work of the views of deepening economic reform," which also published the National Development and Reform Commission "in 2009 on the work of deepening the reform of the economic system view", of which, "the introduction of property tax" which included eye-catching.

Property tax in 2003, was timely, and experienced a "surge of discourse", and then enter the number of city property tax the "tax simulation experiment" phase, the peak period of the bubble in housing prices from time to time been "picked up."

Property tax in the fight against real estate speculation and the bubble has a very large power. It is almost accepted worldwide as a tax, whether it is in developed countries (Britain and the United States Japan) or developing countries (Brazil) have adopted this approach. Its core idea is simple: to maintain links through increased real estate costs, lower circulation costs to determine the optimal asset allocation. It increased the burden of holding the asset, but reduces the purchase of the "threshold", so that "hoarding" the increase in the cost of the asset, and "occupied" the declining cost of the asset, which is a line with the social justice to guide resource allocation. In fact, in this way the real estate credit policies with the "owner-occupied housing" preferential interest rates and lower down payment is the same mechanism.

It should be noted that property tax to be accepted and if the opportunity to launch, it is necessary to resist the forces of the various considerations, the appropriate strategy to make some of arrangements. Frankly, the local government is one very important variable. Some local governments concerned about property tax may be "obliterated" some of their financial interests of the land, the land as it does not have the financial as the "extra-budgetary revenue," the benefits of flexible and disposable. We believe that property tax must be to ensure a longer life, the local government to secure a stable income from their land of not less than gold. Otherwise, local governments have power to hinder this policy. Thus, the introduction of property tax for local governments is the first principle of "the principle of revenue neutral" - it is not an "erosion of interest" tool.

First of all, popular with a different point of view, the introduction of property tax does not mean that we should abolish the land transfer payments (to be replaced by leased land grant). The reason is simple, the property tax would not be appropriate to combat the demand for investment, house prices inevitably fall, and prices naturally lead to land prices would drop down (in fact, rely on speculation in real estate, and now a lot of land auction bids and re-produce low-cost for support), In this sense, property land transfer tax is part of the interest payment "substitute", as long as the local government land auction is transparent, the number of commitments in the supply is stable (do not stop the land auction prices, restricted the supply of land), then gold is a land market prices, it can continue to exist.

Secondly, the property tax includes not only residential, but also a variety of real estate business. In other words, as long as the urbanization rate on the rise, some local governments operate their city was "charming", then the size of the tax base and tax revenue will expand, if the proceeds of these future growth through the discount factor folded into the present value, to ensure that their higher than the current fiscal revenue land. Of course, it can also calculate the property tax rate.

The most important thing is that the Central Government may consider to be designated as the local property tax revenue, if the duty to take hours, then to local governments could also consider a relatively large share. In fact, a number of local government finance extra-budgetary revenue of the land of love, but also have a specific reason. Institutional framework in the tax system, the local government tax revenue has been strong there are some "anxiety" and preference for local government "extra-budgetary income."

For the owner of real property (the object of taxation), they are very concerned about the property tax calculation. We believe that the market value assessment is still based on the best, but should be flexibility in the use of this principle. For example, if a cell suddenly a number of high-priced real estate transactions, which led the entire district property valuation, and in fact other stable owners and can not be traded this price, this is a matter of fact style inflated estimates. Can be considered, to take stock of the MACD calculation formula, the collection of the last 3 years is similar to the patches of real estate prices to the weighted (according to a recent transaction price of new houses), so as to arrive at a more secure market estimates, and thus resolve socialobjection.