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Real estate tax reform in China: taxation scheme and effect assessment

Author

Listed:
  • Li Qi

    (HeBei University)

  • Chen Shuyun

    (Central China Normal University)

  • Gao Zhenjuan

    (HeBei University)

Abstract

This article conducts a study on Chinese real estate tax levy mechanism characterized by “property tax” attributes on the foundation of “benefit tax” properties. Utilizing China Household Finance Survey data from 2019, the article estimates the tax-paying ability of various provinces under workable tax rates and devises five distinct tax relief schemes. By comparing the distribution of tax burdens, it finds that the “per capita value exemption” scheme yields the most robust progressivity and the most favorable outcome in terms of income adjustment. Building on the “per capita value exemption” scheme, three tax redistribution schemes are fashioned. The investigation into the repercussions of the real estate tax on overall family welfare through the Atkinson social welfare function reveals that the “per capita value exemption” scheme, combining with the redistribution scheme of “subsidies for families with minor children” is currently the most reasonable combination in the real estate tax collection plan.

Suggested Citation

  • Li Qi & Chen Shuyun & Gao Zhenjuan, 2025. "Real estate tax reform in China: taxation scheme and effect assessment," SN Business & Economics, Springer, vol. 5(6), pages 1-20, June.
    • Handle: RePEc:spr:snbeco:v:5:y:2025:i:6:d:10.1007_s43546-025-00824-9
    DOI: 10.1007/s43546-025-00824-9
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    References listed on IDEAS

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    More about this item

    Keywords

    Real estate tax; Taxation scheme; Effect assessment; Atkinson social welfare function;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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