China is unlikely to introduce a general property tax this year as it still needs time to prepare for it, a senior government economist said yesterday.
Talk that China could levy an annual withholding tax, which would replace taxes and fees that are mostly payable when a property is bought or sold, has intensified since Beijing started to cool property investment in December.
Zhu Baoliang, chief economist with the State Information Centre, a think-tank under the National Development and Reform Commission, said it was unlikely that China would start collecting the tax this year.
‘Property tax is a very complicated issue and will not be rolled out any time soon,’ he told reporters.
China is already running a trial property tax scheme in 32 cities, counties and districts.
Some industry experts say the tax, once applied, could help bring down China’s property prices as it would dampen market confidence and squeeze investors’ profit margins.
China will be very careful not to over-tighten its real estate policies, Mr Zhu said, adding that it would wait and see the outcome of measures already taken.
Property sales account for more than 10 per cent of the country’s gross domestic product.
Source : Business Times – 21 Jan 2010
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