Beijing to Keep Real Estate Restrictions, Says No to Property Tax

An announcement by the Beijing Municipal Commission of Housing and Urban-Rural Development on December 16th made clear that China’s capital plans to keep in place restrictions on the residential real estate market designed to control housing prices.  However, the Commission also noted that they have no plans at present to adopt property tax measures such as have been put in place in Shanghai, Chongqing and other cities around the nation.

According to an article in the China Daily,

 

Restrictions on housing purchases in Beijing will continue next year without relaxation despite expected falls in property prices so far, local officials said on Friday.

Even so, a property tax is unlikely to be put into effect for Beijing, they said.

This year, the average price of commercial housing units stopped rising in July and so far has been lowered by 6.3 percent below what it had been in the same period last year. Of all of those who bought property in the 11 months of the year, 90 percent were first-time buyers, said an announcement released by the Beijing Municipal Commission of Housing and Urban-Rural Development.

“The restrictions worked well this year,” said Wang Rongwu, with the commission, at a news conference on Friday morning. “But keeping the property market sound will require prolonged restrictions. Our specific goals for the purchase limits next year are still under discussion.”

Chen Baocun, deputy secretary-general of the National Real Estate Manager Alliance, said property developers will be able to cope with an extension of the limits.

“Developers didn’t expect a sudden drop of the purchase restrictions next year,” he said. “They are prepared to accept the policies for a longer time.”

In an attempt at tamping down property prices, the central government took time at the country’s central economic work conference on Wednesday to encourage more cities to adopt a property tax. Such a tax is already being tried out in Shanghai and Chongqing.

Beijing, though, is not likely to look seriously at adopting one, “unless it is otherwise required to by the central government”, Wang said.