Source: CCTV.com

02-01-2007 16:28

China's new land appreciation tax rule has taken into effect starting from Thursday. The tax rate will be 30 to 60 percent. The property developers will face tightened auditing on their land appreciation bookkeeping.

From February the 1st, China will officially levy a land appreciation tax at 30 to 60 percent.

China has worked hard to cool the sizzling property market, hoping to prevent a potentially devastating speculative bubble with a series of measures.

Land appreciation tax won't lift housing prices

Worries have accumulated on China's soaring housing prices, after the central government announces stricter taxation rules. House buyers were concerned whether this will add to the already steep house price. But government officials explained this is unlikely to happen.

The State Administration of Taxation released a notice recently, saying it will enforce a land appreciation tax. Home buyers are nervous about the new tax item, as the sizzling housing prices already make them stepping back from new homes. However, officials from the taxation authority explained that the taxed item is not new.

Chen Xin, senior official of State Administration of Taxation, said "The news that we will impose the land appreciation tax from February 1st is a misunderstanding. It has been taxed since 1994. We made the notice for better implementation of the tax."

Chen said that local governments used to have various regulations on when and how the tax should be collected. In the recent notice, a unified standard rules that the tax will be collected from the developers after a project is completed, so that it will not affect house buyers.

China's housing market continued to heat up in 2006. And the government responded by issuing policies to cool the market. Although the policies have created lots of uncertainties for buyers and sellers, it is for sure that real estate investment is becoming more rational.

 

Editor:Du Xiaodan