China state think-tank makes case for property tax

BEIJING: China should launch a property tax to cool the housing market, which remains dangerously over-priced, a state think tank said in a report published on Tuesday, June 22.

Without a property tax, local governments would be reluctant to address potential property bubbles because of their reliance on revenue from land sales, a research team with the State Information Centre, a think-tank under China's economic planning commission, said in a report published in the China Securities Journal.

"Local governments have no intention of curbing high property prices, and it is an important reason for the failure of macro-economic control measures," the report said. "The key to changing the situation is a property tax."

China's State Council, or cabinet, said earlier that it would press ahead with a property tax reform this year.

Media reports in recent months have suggested that China could start levying an annual tax on residential property on a trial basis, aiming to curb speculation

Talk of the tax has helped to drive down the Shanghai's benchmark stock index. -- Reuters