No let up in home price rises

Updated: 2013-04-26 01:20

By WEI TIAN (China Daily)

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The tax has been tested in Shanghai and Chongqing since the beginning of 2011, but mostly for buyers of second homes or owners of high-end property.

This week, the State Administration of Taxation denied that the pilot program will be extended to other cities, such as Hangzhou, adding that there is "currently no timetable for a national expansion".

But, according to Li, the property tax pilot program may be accelerated in major cities, and levies will not only be on new homes but also on existing units at all levels.

Meanwhile, he suggested that the current land transfer mechanism, which charges a one-off fee to use the land for 70 years, could be changed to rents paid annually.

The move "could ease financing pressure for developers and provide long-term fiscal revenue for local governments", he said.

Zhang Hanya, a researcher at the Institute of Investment of the National Development and Reform Commission, said the government has been focusing on curbing speculative demand, while a more urgent issue is to add more supply.

"The government should reduce its administrative measures in the housing market and let the market play its role," Zhang said.

This view was echoed by Zhao Song, director of the land price division of the China Land Surveying and Planning Institute, who said that the marginal effect of administrative measures has been declining, and many, such as purchase restrictions, have proven to have brought a negative impact.

Wang Juelin, former deputy director of the Policy Research Center of the Ministry of Housing and Urban-Rural Development, said the market is under the spotlight this year mainly because of the overheated market in first-tier cities.

"However, the property markets in central and western regions remain stable, and some even reported price declines. Such regional differences should be taken into consideration when formulating new policies," he said.

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