CRI听力: Property Tax May Come Soon

In the stock market, the prices of many mainstream real estate stocks are going down, despite the A share market rising in the past few days. The reason behind the real estate sector's fall is simple: the "property tax" may come soon.

Our reporter Li Dong has the details.

Reporter:

According to related reports, after 6 years' trial operation in many cities, accurate figures are available about the effectiveness of the Property Tax. These figures may help accelerate the wider implementation of the Property Tax.

Li Huan, deputy director of the Tax Institution at the Central University of Finance and Economics says the coming of the Property Tax may help curb speculation in the real estate market.

"Usually tax will be collected during the transaction process. However, the Property Tax may be collected at the time of the new owners taking possession. This may increase the cost of property purchases and reduce the incentive to make that property purchase."

The Property Tax may combine the tax due before and during the transaction into one overall payment. Property owners would be required to pay a proportion of the Property Tax every year in a period of 40 or 70 years. Therefore, the property price may drop about 30 percent.

Many citizens hope the coming of the Property Tax may significantly lower property price.

"I hope the Property Tax will really lower property prices."

"If the Property Tax starts to be collected, property investments may not be that profitable any more."

Kang Sheng, the general manager of a guarantee corporation says, the new Property Tax may drastically increase investors' investment costs.

"Investors may revaluate their property investment decisions. Because, once they start to buy property, they may face bigger difficulties with financing. This policy may have an effective impact in curbing fast growing property prices."

Related reports show that the Property Tax may first start to be implemented in the commercial property market in big cities like Beijing and Shanghai.(www.hXen.com)

However, the commercial property market only makes up a small portion of the whole property market. Kang Sheng says the Property Tax may balance the property price only when it covers different fields in the property market.

"The tax should also consider many things, like the per capita living space, how many properties one person owns, as well as the process of collecting the tax and the tax collecting rate."

Li Dong, CRI News.