Beijing [China], October 24 (ANI): China has decided to pilot testing property tax levies in selected cities during the coming five years, to garner experiences before proceeding with formal legislation, reported local media.
This comes when China's second biggest real estate developer Evergrande is marred with debt it cannot pay back.
China's top legislature, the Standing Committee of the National People's Congress (NPC), adopted the decision on Saturday to authorise the State Council, the cabinet, to pilot property tax levies in some regions, Global Times reported citing Xinhua News Agency.
A trial property tax could be tested by the end of this year in selected first and second-tier cities, said industry experts stressing that testing will be possible in the cities that have hot real estate markets, most likely in Guangdong's Shenzhen, Zhejiang's Hangzhou, and the southern island province of Hainan.
Since 2011, the Chinese central government tried out levying the taxes on high-end private residential properties in Shanghai and Chongqing, two megacities.
After that, there has been much discussion of expanding the tests nationwide. But there is little progress to date as many local governments are reluctant to push for such a tax out of worries that the property taxation will cause property values to drop, and dampen market demand of land, Global Times quoted a crucial source of local government's revenues as saying.
The property tax in the pilot areas will be levied on all types of real estate, including residential and non-residential properties, excluding legally owned rural houses, according to Xinhua. (ANI)