Taxes proposed to ward off real estate crisis
(Xinhua)
Updated: 2006-08-01 06:25
A leading economist has proposed that the Chinese government collect property
taxes and real estate transfer taxes to rein in speculative investment and ward
off a possible financial crisis.
Owners should pay an annual property tax according to the size of their homes
and the government should collect transfer taxes to redistribute profits
generated by rising home prices, said Lin Yifu, director of the China Economy
Research Center of the Beijing University.
Since the government had adopted macro-controls over the real estate market
last year, increasing investment and price hikes had slowed slightly, but rising
prices in some big cities, imbalance between supply and demand and poor market
regulation remained.
Property was still seen as a sound investment in some circles, while a
combination of low interest rates and expectations of currency appreciation had
sucked in overseas money to China's real estate sector.
Lin told a seminar in Dalian, northeast China's Liaoning Province, that if
speculative demand continued, property prices would surge beyond the reach of
the vast majority of people and businesses, leading to a market bubble and
financial crisis.
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