Registration a step toward tax reforms

According to recent media reports, a long-awaited set of real estate registration rules could be issued before the end of this year.

The creation of a real estate registration system can help spread adherence to the rule of law within China's increasingly market-based economy. Such a system can protect the property rights of ordinary citizens and facilitate market activity as well.

While a registration system is unlikely to lower prices over the short-term, its real benefit could be in helping to promote needed reforms to the country's tax regime.

Access to accurate registration records can help pave the way toward the eventual rollout of a nationwide tax on property ownership. A levy of this kind would deepen economic reforms and support the construction of a stronger legal environment, thereby furthering two of the central leadership's top priorities.

With the tax expected to be levied based on the actual value of assets owned by citizens, a tax on property can serve an important function in redistributing income and supporting the healthy development of the real estate market.