China to expand pilot property tax scheme: paper
BEIJING (Reuters) - China will expand its pilot property tax reform beyond Shanghai and Chongqing in an effort to cool rising housing prices, an official from the State Administration of Taxation said in comments published on Friday.
It was the latest confirmation of the government's intention to restrain real estate speculation in the wake of fresh data showing home prices rising again after eight consecutive months of declines in response to a campaign to curb prices put in place more than two years ago.
The cities of Shanghai and Chongqing were the first Chinese cities to enforce property ownership taxes last year, raising taxes on those with multiple homes to penalize speculators.
China's plan for a nationwide property tax is designed to unify its present array of property related taxes and replace a slew of restrictions on multiple and speculative home purchases that had seen property prices surge 10-fold in a decade.
"In next step we will further expand a pilot property tax program and gradually establish a system of property related taxes," Cong Ming, an official from the State Administration of Taxation was quoted by the official China Securities Journal as saying.
China Overseas Land & Investment (0688.HK) said in August that it expected more restrictions in China's property industry, including the wider application of the property tax.
China began its crackdown on property speculation after prices rocketed when local governments began selling swathes of land to raise cash for infrastructure investment under Beijing's 4 trillion yuan ($635 billion) stimulus program, launched in response to the 2008-09 global financial crisis.
Tightening credit for home buyers and restricting the number of properties individuals can own have been the key tools used by the authorities to calm developer and investor speculation.
The application of those policies have also been blamed by some analysts for deepening a downturn in the domestic economy in the face of stiff global headwinds, given that activity in the real estate sector directly affects 40 other industries.
Property prices though appear to have been revived by Beijing's recent moves to ease monetary policy to help shore up economic growth as foreign demand for goods from the country's vast factory sector falters.
That has raised concerns about a fresh round of housing inflation that policymakers are anxious to stamp out.
State-run domestic media speculate frequently that China is set to raise transaction taxes, or extend the pilot property tax program.
(Reporting By Xiaoyi Shao and Lucy Hornby; Editing by Nick Edwards)
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