MOF clarifies report on tax
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Jia Kang, head of the Research Institute for Fiscal Science under the Ministry of Finance, denied Monday an earlier report that a new property tax would not come out within the next three years.
The China Times report had quoted Huang Hanquan, a researcher at the National Development and Reform Commission, that Beijing would delay the introduction of a new property tax for the next three years.
"Huang is a researcher," Jia said. "His opinion cannot represent the government."
Jia, an advocate of the property tax, reiterated the urgency and significance to tax homeowners who live in their homes to rationalize the behavior of investors.
The property tax will become a stable source of income of local governments and tamp down rising property prices at the same time, he said.
But he warned the property tax cannot be seen as a panacea. "It won't drag the prices down dramatically because no country can avoid a real restate boom in the process of urbanization."
"I have seen no possibility that the housing prices will reverse in the long run," Jia said. "As more than 500 million rural people will move from the rural areas to the cities in the future, no force can reverse the rising up of property prices."
A recent spate of measures to rein in high property prices has shown the government's regulatory muscle. But analysts believe a new round of tightening measures are not likely in the near future, given that the market already has shown signs of cooling down. The problem for local governments now is how to implement the measures properly.
"Without the property tax, real estate market will go unchecked," Jia said.
The Shanghai Composite Index was up 3.4 percent today, buoyed by a surge in property shares after the China Times report made headlines nationwide over the weekend.
