Beijing deny reports about property tax scheme

Beijing Municipal Tax Bureau on Thursday refuted media reports that the pilot local property tax scheme would soon be implemented in the capital city.

The bureau said it was unaware of any plan to expand the property tax scheme to include Beijing.

Recent media reports said that cities including Beijing, Shenzhen, Nanjing and Hangzhou had submitted property tax plans to the Ministry of Finance, State Administration of Taxation, and other government agencies, which will then send these plans to the State Council for approval.

The news triggered market concerns about expansion of the property tax beyond the original pilot programs in Shanghai and Chongqing.

According to media reports, Beijing's property tax plan would allow each household to have 24 square meters of tax-free indoor housing area, while in Shanghai the tax-free area is 60 square meters.

However, difficulties exist for the implementation of the property tax, Beijing News quoted business commentator Ma Guangyuan as saying Thursday.

The lack of a unified system for sharing housing information nationwide will make it difficult to implement collection of the tax, which reportedly targets second and subsequent homes, Ma said.

Without such information being shared nationwide, policymakers will not be able to find out the exact number of houses an individual owns, Ma noted.

The property tax is expected to boost the coffers of local governments at a time when land sales revenue is on the wane as the amount of land available for sale is falling.

It could also help boost housing supply by forcing owners of multiple homes to sell, which would eventually lower housing prices.