Following the recent announcement by the country's top tax authorities, those intending to add the names of their spouses to their property ownership certificates can now breathe a sigh of relief.

On Thursday, the Ministry of Finance and the State Administration of Taxation jointly issued a notice stipulating that no taxes will be imposed when a married couple changes their property registration from sole ownership to joint ownership.

A new judicial interpretation of the Marriage Law by the Supreme People's Court last month, which came into effect on Aug 13, stipulates that real estate purchased prior to a marriage is to be treated as the personal property of the registered owner and should not be considered a joint asset in the event of divorce.

In the light of this change, some spouses sought to ensure they would not lose out in the event of a divorce by getting their name added to their spouse's property certificate.

The tax authorities of Nanjing, capital of East China's Jiangsu province, sensing an opportunity to grab some money from this trend quickly issued a regulation on Aug 23 imposing a 3 percent tax on couples changing their property ownership.

Other cities soon followed suit. Shortly after Nanjing's move, Chengdu, Qingdao, Suzhou, Wuhan and other cities adopted similar policies.

The spreading of the "name-adding tax" across the country led to a public debate over its legitimacy, as such a tax by local authorities obviously contradicts the essence of the country's tax laws and regulations.

It is common sense that adding a spouse's name to a property ownership certificate neither results in an essential transfer of one's assets nor produces any income, which are preconditions for taxation. At the same time, local authorities are not entitled to any taxation without the authorization of local people's congresses.

Following the joint regulation by the Ministry of Finance and the State Administration of Taxation, the name-adding taxes imposed by these local tax authorities should be refunded.

Chinese citizens have already complained about the heavy burden of taxes and are sensitive to any more taxes. In the context of the central government's vowed efforts to relieve people's tax burdens and increase their incomes, so as to boost domestic demand, the country's tax departments, whether central or local, should restrain their tax-levying impulses and remain very cautious about introducing any more taxes or increasing those already in place.

(China Daily 09/05/2011 page8)