Zhang Dejiang (张德江), chairman of the Standing Committee of China’s National People’s Congress, has proposed the drafting of real estate tax legislation in 2018, more than five years after the matter was first put on the agenda by the party central committee.
Zhang made the recommendation while delivering his report on the Standing Committee’s work to the 13th NPC on 11 March, marking the fourth time that Chinese officials have touched upon the issue of real estate taxation since the start of the Two Sessions.
On 5 March Chinese Premier Li Keqiang said that China must “steadily advance real estate tax legislation” in his government work report.
Zhang Yesui (张业遂), spokesperson for the 13th NPC, and Shi Yaobin (史耀斌), vice-head of China’s Ministry of Finance, have also said that the NPC Standing Committee and the finance ministry will take the lead in arranging for the drafting of new real estate tax legislation, and are currently in the process of designing, refining and discussing provisions.
Shi said to reporters that the real estate taxation system will take into account China’s national circumstances, as well as merge other related forms of tax.
“We may combine and merge certain related levies, as well as rationally reduce certain tax and fee burdens for real estate during the construction and transaction stages,” said Shi.
“This will enable us to design a real estate taxation system that is more rational and fair, and capable of playing the role of raising fiscal revenue, as well as actively contributing to adjustments in revenue allocation and expediting social equity.”
The central government first proposed that “real estate tax reforms be advanced when appropriate” at the third plenary session of the 18th Party Central Committee in November 2012, yet progress on that front has since stalled.
Lou Jiwei (楼继伟), chair of the National Council for Social Security Fund and formerly the head of the Ministry of Finance, said to The Beijing News that “there are many technical problems behind why a real estate tax hasn’t been unveiled after such a period.
“Simply levying and managing a single tax requires clarification and isn’t easy…tax collation laws need corresponding amendments.”
Yin Zhongqing (尹中卿), vice-chairman of the NPC’s finance and economics committee, said that “advancing real estate tax reforms requires caution, as tampering with a single hair can affect the whole body.
“Especially under circumstances where we need to prevent financial risk and avoid large-scale fluctuations in real estate prices, we need to properly scrutinise opportune moments for the introduction of real estate taxes.”