no conditions for China to extend property tax lawsuit this year – Xinhua English.news.cn
BEIJING (Reuters) – Conditions are not in place for China to expand a land tax trial this year, the official Xinhua news agency said on Wednesday quoting the finance ministry, suggesting authorities act cautiously to avoid to further damage confidence in the sector.
China’s property market cooled last year as Beijing’s deleveraging drive sparked a liquidity crunch among some major property developers, leading to bond defaults and projects shelved or left unfinished.
Overall demand remains sluggish, although a series of measures have been put in place to revive buyer interest.
New home prices stagnated in February after rising slightly a month earlier, official data showed on Wednesday.
Implementing a property tax faces challenges including macroeconomic pressures and downward pressure in the real estate market, said Yan Yuejin, research director of Shanghai-based E-house China Research and Development. .
“This decision is sure to reduce concerns for home buyers,” Yan said, adding that she was also supportive of real estate companies.
On Wednesday, Chinese Vice Premier Liu He urged government bodies to put in place market-friendly policies and “cautiously” introduce measures that risk hurting markets. He is also committed to tackling risks in the real estate sector.
China will implement city-specific policies to promote the healthy development of the real estate industry, Premier Li Keqiang said at the parliament’s annual meeting in early March.
In 2011, China launched a land tax pilot project in Shanghai and Chongqing, and the idea of rolling out a new trial met resistance from stakeholders, including local governments, who rely heavily on land sales like source of funding.
In October, parliament’s top decision-making body said it would introduce a pilot property tax in some areas, but did not identify the areas or give further details.
Most analysts expected the property tax to be delayed, according to a Reuters poll last month.
At the annual parliament meeting earlier this month, China omitted a potential property tax from its 2022 legislative plan for the third consecutive year.
(Reporting by Kevin Yao, Liangping Gao and Beijing newsroom; editing by Louise Heavens and Mark Potter)
Copyright 2022 Thomson Reuters.