CPPCC members divided on property tax

How to tame the rocketing housing prices is on the minds of many CPPCC members. A large number of proposals are concerning the real estate market.

Soaring prices have made homes increasingly unaffordable to ordinary people and triggered widespread public complaints. And concerns of a real estate bubble are threatening the stability of the Chinese economy. Many CPPCC members have made proposals for reining in the market.

Jia Kang, CPPCC member, said, "Imposing a reasonable level of taxes on real estate ownership will contain speculative activities as it will add to the costs of speculation. The real estate tax will change the market expectation of both home buyers and suppliers, and thus stabilize the housing prices. Though we do not expect the housing prices to fall amid a long-term urbanization process in China, I believe it can help curb the rapid price rises."

But some CPPCC members say the timing is not right for taxing home ownership as the taxation may further dampen consumption.

Mu Qiru, CPPCC member, said, "For commercial properties, such as big shopping malls, imposing real estate taxes will increase their operating costs. Such increase may, in turn, be translated to product prices. This goes against our goal to encourage domestic demand. So we should be cautious about the issue."

But many members share the opinion that the government should increase its supply of affordable housing to low-income earners.

Chen Zesheng, CPPCC member, said, "The policy of 'making ordinary people have adequate housing' in Hong Kong can serve as a reference to the mainland. Under this policy, the government subsidizes the low-income earners so that they can rent homes at very low costs."

Jia Kang said, "The government should take into account the fact that not everyone can afford to buy houses. Therefore it should ensure that even the most disadvantaged group has access to low-rent housing."

Some members are of the opinion that the recent public auctions of land by the government has fueled a surge in land prices. They say reining in housing prices requires the reform of the way property developers obtain land.