Original title: The pilot project of personal housing property tax is expected to expand after 10 years
Author: Chen Yikan
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In order to implement the “housing to live without speculation”, the real estate tax law that has not yet been promulgated has high hopes and will be one of the policy tools for the property market control.
However, many fiscal and taxation experts analyzed the real estate tax law in the short-term that it is difficult to introduce the real estate tax law, but the pilot project of individual housing real estate tax is expected to expand, paving the way for real estate tax legislation. The new round of real estate tax pilots will be different from the previous pilots in Shanghai and Chongqing.
Real estate tax pilot from suspension to restart
To confirm the above point of view, recently, the responsible comrades of the Ministry of Finance, the Budget Working Committee of the Standing Committee of the National People’s Congress, the Ministry of Housing and Urban-Rural Development, and the State Administration of Taxation held a symposium on the pilot work of real estate tax reform. This meeting listened to the opinions of the responsible comrades of the people’s governments of some cities and some experts and scholars on the pilot work of real estate tax reform.
The official public statement on real estate tax has never mentioned the word “pilot” before, but has repeatedly reiterated that real estate tax adheres to the principle of “legislation first”, that is, the premise of real estate tax levy is the completion of legislation.
According to the analysis of a number of fiscal and taxation experts, under the principle of adhering to the real estate tax legislation, the real estate tax reform pilot is essentially an expansion of the existing real estate tax pilot. From the perspective of taxation of personal housing, the real estate tax under legislation is not substantially different from the current real estate tax.
The real estate tax that has not yet been introduced is still being drafted and perfected. It will merge the existing real estate tax and urban land use tax. The real estate tax implemented in 1986 exempts personal properties for non-business use, so personal housing real estate tax is not actually levied.
However, in order to guide residents to purchase houses rationally and reasonably adjust income distribution, in 2011 the State Council allowed Chongqing and Shanghai to impose a pilot reform of real estate tax on individual housing. This pilot has been around for ten years. In 2013, officials stated that they would continue to expand the scope of the real estate tax pilot. However, after the central document first proposed at the end of that year to “speed up the real estate tax legislation and promote reforms in a timely manner”, the expansion of the real estate tax pilot was replaced by the first real estate tax legislation.
Xiong Wei, director of the Finance, Taxation and Legal Research Center of Wuhan University, analyzed by China Business News that the above-mentioned meeting of the Ministry of Finance has released a big signal that it is likely to implement real estate tax pilot projects in some cities in the future. The trial of real estate tax in some cities is still an initiative under the premise of the “Provisional Regulations on Real Estate Tax,” and is an exploratory process for deepening reform. The “Interim Regulations on Property Taxes” is an administrative regulation formulated by the State Council. Based on the needs of reforms, the State Council authorizes specific cities to pilot property tax reforms. After summing up experience, they will be submitted to the legislature to formulate laws. This conforms to the logic of reform and does not fundamentally conflict with the legal principles of taxation .
“Choosing some local pilots can accumulate legislative experience, break through various technical obstacles, observe social effects, and break the constraints of vested interests. I think it is worth a try.” Xiong Wei said.
Shi Wenwen, director of the Finance and Taxation Law Research Center of China University of Political Science and Law, analyzed on China Business News that in recent times, the Ministry of Finance has repeatedly proposed to actively and steadily advance the legislation and reform of real estate tax. Combining the above-mentioned symposium, it is very likely to launch real estate tax pilot projects in some cities in the future , Accumulate experience for real estate tax legislation.
Li Xuhong, a professor at the Beijing National Accounting Institute, believes that since real estate tax is the core attribute of local taxes, the design of the tax system should properly delegate local tax powers, and local governments should determine the area of real estate tax reduction and exemption and set low tax rates based on their economic development. Wait. At the same time, since it is a local tax, it leaves room for step-by-step implementation. From the perspective of my country’s regional economic development, regional differences exist. Therefore, the selection of some regional pilot projects is also of positive significance for the steady advancement of real estate tax legislation.
Xiong Wei believes that in order to meet the legal requirements of some new local property tax pilots, it is recommended that the National People’s Congress authorize the State Council to allow it to approve the provincial government to conduct a pilot reform of property tax collection on personal non-business properties. With this authorization, the State Council allows local governments to pilot property tax reforms no longer a sub-authorization, and there is no need to modify the “Provisional Regulations on Property Tax.”
Of course, the industry does not rule out another possibility, that is, after real estate tax legislation is completed, some cities will be selected to carry out real estate tax trials.
The new pilot should be different
Chongqing and Shanghai, which have been piloting property tax for ten years, have achieved certain results. Although some scholars have different results in measuring the impact of the real estate tax pilot on local housing prices, most believe that the impact on housing prices is small.
Shanghai and Chongqing differ in their specific plans for levying real estate taxes on individual housing pilots, but they also have some things in common. For example, the scope of real estate tax levy in the two places is relatively small. Shanghai only levies taxes on newly purchased houses and does not involve stock housing; while Chongqing only levies taxes on single-family villas, high-end houses and multiple suites; the property tax rates in both places are not High, Shanghai has two levels of 0.4% and 0.6%, and Chongqing has three levels of 0.5%, 1% and 1.2%.
Many fiscal and taxation experts believe that the new era of real estate tax pilots should implement the requirement of “housing to live without speculation”, sum up the previous pilot experience, and further optimize the local pilot program, such as the appropriate expansion of taxation scope, consideration of taxation based on the property evaluation price, and appropriate tax rate Improve etc.
Xiong Wei told China Business News that for the taxation of individual housing property tax, the basic housing needs of the people must first be considered. This part of the property is not suitable for taxation. This can relieve most ordinary families from worrying about the pilot property tax without worrying about increasing the burden. With this opportunity of reform, the real estate market can be systematically reformed. All real estate should be considered. The amount can be taxed and the fair burden, including small property housing, cannot be ignored. The specific local real estate tax pilot program should fully absorb public opinion, and the reform program shall be reviewed and approved by the local people’s congress and submitted to the examination and approval authority for the record.
Fan Ziying, a professor at Shanghai University of Finance and Economics, told CBN that the current pilot property tax has little effect on housing prices, mainly because the tax rate is low. We did a study using Shanghai housing registration data. When the real estate tax rate is increased to 7%, it can almost offset the increase in housing prices.
Xiong Wei suggested that the real estate tax rate can be considered lower. The real estate tax pilot is not to increase local fiscal revenue for the time being, but to convey the government’s determination to curb real estate speculation. At the same time, the real estate tax pilot should focus on the establishment of rules, overcome various technical obstacles, and accumulate experience for the next comprehensive reform.
At present, the real estate tax in Shanghai and Chongqing is calculated based on the transaction price of the real estate, not the market price. The Ministry of Finance has previously made it clear that one of the main points of the real estate tax legislation is to levy real estate tax based on the assessed value, not the original value of the real estate (house purchase transaction price).
Real estate appraisal value taxation is mainly based on the corresponding estimation of the market transaction price of similar real estate, which can more truly reflect the value of the house. Some experts suggest that the new round of real estate tax pilots can consider levying taxes based on the appraised price of houses.
In fact, both the Shanghai and Chongqing real estate tax pilot schemes are clear. In the initial stage of the pilot or when the conditions are not mature, the transaction price of the house will be used as the basis for tax calculation. When the conditions are mature, the tax will be calculated with reference to the assessed value determined by the real estate market price.
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