No signs of a property tax in China, despite fears of a housing bubble

Home prices in the country jumped nearly 11% year-over-year in February

New York /
Mar.March 20, 2017 03:10 PM

The Chinese government won’t introduce a property tax this year, despite claims from academics, politicians and economists that it would help curtail the country’s soaring home prices.

The annual National People’s Congress, held this month, did not feature a discussion of the topic, the Wall Street Journal reported. A NPC spokesperson said a property tax will not make it onto the legislative agenda at all in 2017.

There have been concerns for months that China’s property market is overheated, and some economists have expressed concern the Chinese government is not moving fast to deal with the problem.

Last month, home prices in the country were up nearly 11 percent year-over-year, the newspaper reported, citing official data released over the weekend. In some cities, home prices surged 30 percent in the last year, according to the newspaper.

In September, Wang Jianlin, CEO of Dalian Wanda Group, warned that China’s market is now facing “the biggest bubble in history.”

The country’s vice housing minister, Lu Kehua, last month said the government should act quickly on introducing a property tax. However, with a Communist Party leadership transition due to take place this year, the government is nervous about making any changes that have major implications for the economy.

“The rich, the powerful and other interest groups… opposed the idea because they own better and large homes, and will have to pay more tax,” Yilin Hou, a Syracuse University professor who studies potential tax impacts on China, told the Wall Street Journal.

Meanwhile, the Chinese government is stepping up its efforts to stop locals from buying real estate abroad. Some are skeptical about whether that will have any real impact on the way Chinese nationals invest. But New York City brokers last month told The Real Deal Chinese buyers are moving away from ultra-pricey pads and focusing on value-oriented deals.  [WSJ]Miriam Hall


Related Articles

arrow_forward_ios
With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)
Real estate stocks push up this week as U.S.-China trade tensions ease
Real estate stocks push up this week as U.S.-China trade tensions ease
416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)
Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
RE/MAX CEO Adam Contos (Facebook)
RE/MAX revenue ticks up in Q4 but profit sinks
RE/MAX revenue ticks up in Q4 but profit sinks
U.S. District Judge John Campbell Barker, who was appointed by former President Donald Trump, ruled the eviction moratorium to be unconstitutional. (Getty, Texas Attorney General)
National eviction moratorium ruled unconstitutional, but remains in place
National eviction moratorium ruled unconstitutional, but remains in place
(iStock/Illustration by Kevin Rebong for The Real Deal)
State will use undercover testers to combat housing discrimination
State will use undercover testers to combat housing discrimination
Zillow COO Jeremy Wacksman (Zillow, iStock)
Zillow using Zestimate to streamline cash offers for some homes
Zillow using Zestimate to streamline cash offers for some homes
(iStock/Photo Illustration by Kevin Rebong for The Real Deal)
Dubious gentrification study will backfire on New York City
Dubious gentrification study will backfire on New York City
Home sales were the busiest January on record, but still the fifth month of decline in a row. (iStock)
Pending home sales fall for fifth consecutive month
Pending home sales fall for fifth consecutive month
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...