Revenues reaped by China’s local governments from land sales saw surging growth in the first half of 2018.
Data from the Ministry of Finance indicates that Chinese local governments garnered revenues of 2.6941 trillion yuan in the first half of the year from sales of land, for year-on-year growth of 43%.
The surge in revenues has come as a surprise to many observers, given China’s ongoing crackdown on urban real estate markets around the country.
First and second-tier cities saw land sale revenues falter, with much of the surge coming from third and fourth-tier urban centres.
Beijing’s land sale revenues, for example, fell 25% in the first half, while other major cities such as Shanghai and Guangzhou also saw declines.
In sharp contrast, third and fourth-tier cities saw sales of land for business purposes reach 226 billion yuan in March for YoY growth of 123%, according to data from CRIC.
The comparatively modest city of Foshan in Guangdong province ranked fifth in China for land sale revenues in the first half, with a sum of 57.1 billion yuan.
Many third and fourth-tier cities along China’s main waterways of the Yellow River and Yangtze saw land sale revenues of over 10 billion yuan during the period.
In addition to land sale revenues, land and real estate-related taxes also saw considerable growth.
Contract taxes reached 297.4 billion yuan in the first half, for YoY growth of 16%, while value-added land tax hit 323.1 billion yuan, for YoY growth of 10.7%, and real estate taxes totalled 148.4 billion yuan, for a rise of 6.9%.