While the China government is trying its best to curb high housing prices, the plan to levy real estate tax has been fruitless for a long time, which is another sign that vested interests hinder China from reforming its economic growth model.
According to Macquarie Securities, the average house price in Shenzhen last year was 4 1 times the average income, while that in London, Tokyo and new york was 29 times, 23 times and 15 times respectively. Since the end of last year, 45 cities in China have successively introduced measures such as restricting purchases, aiming at cooling the rising housing prices.
For many years, many economists believed that China should abandon administrative measures such as purchase restriction and levy real estate tax instead. In the landmark blueprint for economic reform approved by 20 13 1 1, the top leadership of China promised to levy real estate tax.
However, market observers say it is unlikely that the government will levy real estate tax in recent years. During the two sessions held in March this year, the China Municipal Government announced that there was no arrangement to submit the draft real estate tax to the Standing Committee for deliberation this year.
"Among the official economists who are familiar with the inside story, the establishment of real estate tax has long been known," said Li Gan, director of China Family Finance Research Center and professor of economics at Texas A&M University. "The problem is politics. No one wants to bear the blame of the bursting of the real estate bubble. "
According to the survey, the ownership rate of self-owned housing in China is 87%, which means that there is a huge and influential group opposed to the collection of real estate tax. In the United States, according to census data, the housing ownership rate is only 64%.
Financial Times Investment Reference (FT), an independent research institution of the Financial Times, UK
confidential
Research) survey found that in large and medium-sized cities, 28% of families own a vacant house. For a long time, China investors' preference for buying houses is greater than that of volatile stock market and bond market with low yield. At the same time, capital controls limit families' ability to buy overseas assets.
Contrary to popular belief, compared with other East Asian countries, the overall housing price in China is not particularly high relative to income. But in a few big cities, housing purchasing power is a big problem. Besides Shenzhen, the ratio of house price to income in Beijing, Shanghai, Nanjing and Hangzhou is also higher than that in new york.
Zhu Haibin, chief economist of JPMorgan Chase in Greater China, said: "The crux of China is that real estate tax may be the most useful in first-tier cities, but for the same reason, real estate tax has encountered the greatest resistance in these cities."
20 1 1, Chongqing and Shanghai implemented the pilot scheme of property tax respectively, aiming at limiting the impact of this tax on low-income families.
There are also some technical problems that make it difficult to promote real estate tax. The most important point is that there is no national real estate registration system, which means that in many cities, local governments are not clear about the identity of the owner of each house.
Hou Yilin, a professor of public policy at Syracuse University, believes that this challenge can be overcome. Hou Yilin published a book last year and put forward a set of detailed suggestions for levying real estate tax in China.
"Determining the identity of the owner is actually not as difficult as imagined." He said, "If local governments are authorized to collect this tax and can decide to use it for local public services, they will have all the motives to implement it."
In Hou Yilin's view, there are at least some reasons to be optimistic about levying real estate tax. He pointed out that a draft of real estate tax has been revised many times, and in China, the policy discussion process is often unknown to the public.
"I am willing to stand on the side of optimists and think that although the implementation of real estate tax has stagnated on the surface, its behind-the-scenes work has never stopped." He said, "China's routine is that once something is announced, everything is ready."
However, other experts are more pessimistic, including Kang Jia, former director of the Institute of Fiscal Science of the Ministry of Finance, who is one of the most influential experts on real estate tax collection in China. The Institute of Fiscal Science has been renamed China Institute of Fiscal Science (China
The Academy of Sciences is a think tank that advises the government.
"In fact, delaying this process under the pretext of various internal discussions is indeed a manifestation of solidification of interests." In an interview this year, Konka said frankly, "It is more difficult to touch the interests than the soul."
(The above answers were published on 20 17-06-27. Please refer to the actual situation for the current purchase policy. )
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