China took a major step towards implementing one of the key mechanisms for gaining better control of the nation’s real estate market recently when it unveiled a trial plan for a national property register.
The move was announced by the State Council as part of the urbanisation program released on Sunday, and confirmed by the Ministry of Land and Resources.
While the measure to build a nationwide list of properties and their owners has been in the works for some time, the Ministry announced this month that the new system will be implemented on a pilot basis in the cities of Nanjing, Ningbo and Zhengzhou starting in June this year.
The national property register is seen as a key instrument for enforcing policies restricting the number of homes owned per person or household. Most Chinese cities now have measures in place to limit the acquisition of additional homes beyond what a household already owns, however, without a coordinated nation-wide tracking system, enforcing such measures has been difficult beyond the city limits.
The complete system for registering and sharing housing information is scheduled to be fully implemented nationwide by 2020.
Potential to Drive Down Property Prices
Some analysts have speculated that the national property register could drive down real estate prices once it is implemented nationwide, due to the enhanced enforcement ability it will give to market regulators. The property register is also seen as a potential tool for tracking official corruption as it would potentially provide a means to tracking assets owned by politicians across city and provincial boundaries.
According to official announcements, the housing registration system will track property deals through the Ministry of Housing and Urban-Rural Development (MOHURD). The data from the system could then be used to enhance tax collection, particularly for owners of multiple properties.
China debuted a property tax system on a pilot basis in Chongqing and Shanghai in January 2011, however, the government has yet to come up with a plan for implementing the system nationwide.