No let up in home price rises
Updated: 2013-04-26 01:20
By WEI TIAN (China Daily)
A housing fair in Shanghai. Experts said a 20 percent income tax on capital gains from property sales may push up housing prices. JING WEI / FOR CHINA DAILY
Tax on secondhand house sales may be transferred to buyers, experts say
Housing prices face significant upward pressure in 2013 due to the possible effect of the current policies and the authorities may tax owners of multiple properties to guard against further price hikes, a top think tank said.
"The tendency of housing prices this year depends on policy selection (by the authorities)," said Li Enping, a property market researcher with the Chinese Academy of Social Sciences, who is also an author of the academy's annual report on the country's real estate sector, which was released on Thursday.
Li said that if local governments decide to strictly implement the tax on secondhand home sales, the prices will inevitably rise because the extra tax will be transferred to buyers, as it is still very much a seller's market.
Meanwhile, Li added, regarding surging secondhand home prices, new properties will also lift their pricing objectives.
In the latest effort to cool the property market, local governments were urged to implement a 20 percent personal income tax on capital gains from property sales, if a homeowner sells the property within five years of its purchase and the property is not the only one owned by the seller.
The authorities in major housing markets such as Beijing, Shanghai and Guangdong said in late March that they would implement the policy, which led to a sharp decline in secondhand home sales in those markets.
Although Li said that other local authorities are only expected to carry out the personal income tax policy on a "selective" basis, he pointed out that the country may tax the possession of multiple properties in the second half, if current policies continue to push up housing prices and worsen the market environment.
"The mismatch between supply and demand has been growing for years," Li said.
He added that the taxes on multiple properties might boost supply and keep overall housing prices at a stable level or even lead to a slight decline.