China says drafting of property tax law 'steadily advancing'

China says drafting of property tax law 'steadily advancing'

March 9, 2019

BEIJING (Reuters) – Work on a draft property tax in China is “steadily advancing” and it will be submitted for review when conditions are right, senior Chinese parliamentary officials said on Saturday.

China has considered a property tax for more than a decade, with market speculation of its implementation rearing its head every few years.

China will “focus energy” on implementing major legislative items this year including a property tax, the head of the country’s largely rubber-stamp parliament said on Friday, though gave no details.

Deputy head of parliament’s Legislative Affairs Commission Liu Junchen confirmed at a news conference on Saturday on parliament’s sidelines that work had started on such a law.

“The relevant side is now studying the drafting of the real estate tax law, and relevant work is steadily advancing,” Liu said, without elaborating.

Deputy head of parliament’s Finance and Economic Committee Uzhitu, an ethnic Mongol who goes by only one name, added that the tax was being drafted by parliament’s budget committee and the Finance Ministry.

At present, relevant departments are perfecting the draft law and discussing “important issues” related to it, he added.

“When the conditions are ripe, it will be submitted to the Standing Committee of the National People’s Congress for initial review,” Uzhitu said, though did not give a timeframe.

The idea of a tax has met with push-back from stakeholders, including local governments that rely heavily on land sales as a key source of financing.

Pilot property tax schemes were introduced in cities such as Shanghai and Chongqing, but the glacial progress to roll it out nationwide has drawn criticism as home prices continued to rise.

In October last year, the official Xinhua news agency reported that a “long-term mechanism” for the property market – including the potential introduction of a nationwide property tax – is being studied.

Prices of homes in major Chinese cities have stabilized in the past year following several waves of purchase curbs to deter speculators.

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