Chinese homeowners may soon get to complain about one of the same things American homeowners do: property taxes.
In an effort to stabilize the country’s notoriously volatile housing market, the Chinese government is considering establishing a property tax, as experts say the lack of one is a major reason why its housing market is so unstable, according to the New York Times.
The move is not a sure thing, but finance minister Xiao Jie wrote in the official Communist Party newspaper late last year that leaders expressed support for establishing a property tax at a party meeting under the not-very-catchy slogan “Legislation first, full authorization, move forward step by step.”
Real estate comprises almost 75 percent of assets for the Chinese but is also a factor in some of the largest booms and busts in the country, with investors eager to pour money into housing and mortgage lending skyrocketing over the past two years.
The lack of a property tax stems from the country’s Communist takeover in 1949, when owning land was at first restricted and then banned. China has also historically had a hard time figuring out who owns what properties, but its Ministry of Land and Resources said in September it had compiled a land ownership database.
Property prices fell by 0.3 percent in Beijing and Shanghai between November 2016 and November 2017 after years of double-digit growth, fueling fears of a possible mortgage crisis, but the government could loosen housing regulations to increase prices. [NYT] – Eddie Small