The introduction of property taxes, which would also apply to residential real estate, is to be extended to some Chinese regions. The goal is, among other things, to cool the growth of real estate prices, which have risen by more than two thousand percent in China over the last quarter century.
Property tax would apply to both residential and non-residential real estate, as well as land. The exception would be rural areas, according to the Chinese parliament’s proposal to extend property taxes outside large cities. It is a dusting off of an idea that first appeared over eighteen years ago.
But the proposal has many critics. The strongest are local governments and councils. Local politicians fear that the introduction of property taxes in regions outside China‘s large settlements will lead to massive sales of real estate or that it will place an excessive burden on households, which would also be affected by the tax.
In some large cities, such as Shanghai or Chongqing, property taxes have been in place since 2011. However, they only apply to property owners in luxury neighborhoods or owners of more than one apartment. Rates range from 0.4 to 1.2 percent.