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Property Tax in Urban China

Author

Listed:
  • Dan Li

    () (First Independent Bank of Nevada, Reno, NV)

  • Shunfeng Song

    () (Department of Economics, University of Nevada, Reno)

Abstract

This paper examines the urban housing sector of China and proposes a property tax reform. Over the past decade, housing price in urban China has been increasing dramatically because of strong demand for self-use, investment and speculation. The booming housing market, however, has brought several challenges for further development, such as housing affordability, inequality, and possible housing bubble. One strategy is to reform the current property tax system. Specifically, this paper proposes that China significantly reduces taxes in circulation but levies property tax during possession. Doing so will increase housing affordability because of lower transaction costs, reduce speculation because of higher cost of holding, stabilize fiscal system because of more sustainable tax revenues, and improve the efficiency and fairness of the property tax system because of the implementation of “ability-to-pay” and “who use who pay” principles.

Suggested Citation

  • Dan Li & Shunfeng Song, 2007. "Property Tax in Urban China," Working Papers 07-008, University of Nevada, Reno, Department of Economics;University of Nevada, Reno , Department of Resource Economics.
  • Handle: RePEc:unr:wpaper:07-008
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    File URL: http://www.business.unr.edu/econ/wp/papers/UNRECONWP07008.pdf
    File Function: First version, 2007
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    References listed on IDEAS

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    1. Shunfeng Song & George S.-F. Chu & Rongqing Cao, 1999. "Real Estate Tax In Urban China," Contemporary Economic Policy, Western Economic Association International, vol. 17(4), pages 540-551, October.
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    Cited by:

    1. Zheng Jian & Daniel Jeongdae, "undated". "Prospects for progressive tax reform in Asia and the Pacific," MPDD Working Paper Series WP/17/08, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).

    More about this item

    Keywords

    Property tax; China;

    JEL classification:

    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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