BEIJING, March 23 China should increase its home
ownership tax on those with three or more properties to target
speculators and as part of measures that replace current
purchase restrictions, Hu Cunzhi, vice minister of Land and
Resources said on Saturday.
The remarks come after the Chinese government warned this
month it could tighten controls to calm frothy home prices,
including speeding up expansion of a pilot property tax and a 20
percent capital gains tax.
Local governments are expected to detail how the two taxes
would be enforced by the end of this month.
"Now, if we can apply economic or taxation methods to curb
the property market as soon as possible, the campaign to control
property prices would have a relatively good effect," Hu told a
"The method that deserves the most consideration is to raise
property tax on those with third or more homes," said Hu, adding
that such a move would boost supply of homes and stabilise
Current property controls that include restricting home
purchases have a quick but negative effect, Hu added, without
The cities of Shanghai and Chongqing were the first Chinese
cities to enforce property ownership taxes of between 0.5
percent and 1.2 percent on second or more homes in early 2011.
Beijing, Shenzhen, Hangzhou and Wuhan are likely to be next
in line to tax home owners, Chinese media have said.
Chinese home prices more than doubled in 2009 after Beijing
rolled out a massive economic stimulus package to combat the
global financial crisis.
It followed with a string of measures to crack down on
property speculators and take the heat out of the market, but
average prices across the country have begun to rise again
recently after falling for ten months.
(Reporting By Xiaoyi Shao and Koh Gui Qing; Editing by Sanjeev