“China launches first property tax” plus 2 more |
- China launches first property tax
- Cave Creek weighs property tax to fund fire services
- China's first property taxes kick in
| China launches first property tax Posted: 28 Jan 2011 12:31 AM PST 28 January 2011 Last updated at 03:19 ET China has introduced its first property tax for home buyers to try to curb record house prices and tame inflation. The measure, which came into effect on Friday, will apply to those buying second homes in Shanghai and Chongqing. The tax, paid annually, is between 0.4% and 1.2% of the purchase price, depending on how the price compares with market averages. Property prices are one of the main drivers of Chinese inflation, which Beijing is keen to keep under control. China's economy is growing far faster than that of any other major country. Its GDP grew by 10.3% last year - the fastest annual pace since the financial crisis. But overshadowing the growth is the worry of inflation. Prices rose to push the rate inflation up to 4.6% in December, far higher than the government's target. 'Curb speculation'The property tax would have "a big psychological effect on potential home buyers," predicted Ge Haifeng, head of research at China Real Estate Index System in Beijing. "China's housing market may get really quiet in coming months," he added. In Shanghai, buyers will pay between 0.4% and 0.6% tax on their new second homes. In the south western city of Chongqing, the tax is more staggered, ranging from 0.5% to 1.2%. The city's mayor, Huang Qifan, said that while it was "impossible for housing prices to fall overnight because of the property tax", it would "help to curb speculation in the housing market". Earlier this week, property development firm Shui On Group said that there was no property bubble in China, and that government curbs on bank lending were making financing more difficult for his industry. 'Change perceptions'The ultimate aim of the tax was to prevent hoarding of properties, rather than to rein in prices, according to Michael Klibaner, head of China research for property company Jones Lang LaSalle. "Previously there was very little holding cost for residential property because many people paid 100% cash for these properties. Now the holding cost is no longer zero," Mr Klibaner said. "When the holding cost is zero, it's very easy to let these homes sit idle. It doesn't cost you anything to let them sit there. "Now there's a holding cost - the hope is it will change the way people perceive real estate as an asset class." This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php |
| Cave Creek weighs property tax to fund fire services Posted: 28 Jan 2011 07:50 AM PST by Philip Haldiman - Jan. 28, 2011 08:40 AM The town of Cave Creek could call a special election for citizens to vote on a proposed property tax to fund fire and emergency medical services. The council will discuss placing the question on the May 17 general election ballot at a special meeting Monday. The levy could raise up to $1.3 million the first year to cover operations only. It would not cover any needed infrastructure. The tax would be levied on all taxable property in town and would remain as long as coverage exists. Each following year, the tax could go up no more than 2 percent. It would be levied beginning July 1, 2012. Property owners currently have the option of subscribing for fire services with Rural/Metro Fire Department. Non-subscribers are billed if the department responds to a call at their property. Town Manager Usama Abujbarah said staff is recommending the property tax in order to bring down the subscription cost to residents. The annual subscription cost has increased 7 percent a year over the past 10 years, and subscriptions are down from 60 to 43 percent of property owners in the past five years. He said the decrease has forced Rural/Metro to cover its costs with current subscribers. The town estimates that the maximum rate of the tax would be 71 cents per $100 of the assessed limited property value (LPV). On average, a resident living in a $200,000 assessed home would pay a maximum of about $140 annually, or about $11 monthly, in property taxes. If the tax is approved, those who currently subscribe to Rural/Metro Fire Department for fire services would pay about 50 percent less than they do today, Abujbarah said. "The more cost goes up, the less people are going to subscribe, but if more people subscribe, the cost overall goes down," he said. "We've been going through a vicious cycle, and it's time to put an end to it." If voters approve the measure, a contract will be put out for bid. The competitors would be the Scottsdale Fire Department, the Daisy Mountain Fire Department and the Phoenix Fire Department as well as Rural/Metro. Councilman Adam Trenk said a property tax to fund a master contract for fire coverage is a good idea on its face, but the money must be used only for its intended purpose. "Before voting for any property tax, citizens must ensure safeguards are in place to prevent property taxes from being diverted to the general fund to ease debt-service expenditures." Cave Creek currently has a property tax that was implemented in 2000 to allow for the acquisition of Spur Cross Ranch Conservation Area. Abujbarah said the tax will end and the loan will be paid for in 2012. Cave Creek resident and property owner Anna Marsolo said she would oppose a property tax. She suggested taking 1 percent of sales-tax revenues produced by the soon-to-be built Walmart to fund a town-wide fire-protection system. "I think you can make the case that the Rural/Metro subscription drop-off is due to the downturn in the economy," Marsolo said. "As water rates went up - even after town officials promised no rate increases - folks had to get the money from somewhere. Not renewing their subscriptions was a good choice for those folks, as the need for Rural/Metro is lower compared to the need for water." This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php |
| China's first property taxes kick in Posted: 28 Jan 2011 12:43 AM PST SHANGHAI (AFP) – China on Friday launched a long-awaited property tax in two of the country's biggest cities, but the mayor of Chongqing in the southwest warned the measure was not a cure-all for soaring prices. People buying higher-end second homes in Shanghai, China's wealthiest city, and Chongqing, home to 30 million people and the country's fastest-growing municipality, now have to pay a 0.4-1.2 percent annual tax, officials said. Earlier this week, the government hiked the minimum downpayment for second homes to 60 percent from 50 percent and ordered authorities to rein in property prices as it moved to quell growing public angst about high real estate costs. But Chongqing Mayor Huang Qifan said the pilot tax programmes were not aimed at clipping the soaring housing prices that are a top consumer concern across the country. "People will ask if I think the real estate tax will definitely bring property prices down.... No one believes the property tax will hit the nail on the head and bring prices down," Huang told a news conference late Thursday. He estimated the levy would generate 150 million yuan ($22.8 million) in revenue for the municipal government this year, according to an official transcript, although state media cited him as saying 200 million yuan. The taxes will have limited impact on curbing property prices, but they will affect the speculators who helped push up housing costs, said Chen Sheng, deputy director at China Index Academy, a property research firm. "It is a historic breakthrough because it is the first time in China that people need to pay for holding real estate assets," Chen said. Michael Klibaner, head of China research for property company Jones Lang LaSalle, said the ultimate aim of the tax was to establish a way for the government to generate long-term tax revenue from property holdings. "Previously there was very little holding cost for residential property because many people paid 100 percent cash for these properties. Now the holding cost is no longer zero," Klibaner told AFP. "When the holding cost is zero, it's very easy to let these homes sit idle. It doesn't cost you anything to let them sit there. It's like gold," he said. The two cities announced different tax pilot projects almost immediately after the State Council, China's cabinet, said it had approved the trials on Thursday. Shanghai announced a flat 0.6 percent tax on new second homes that are double the average market price. New second homes costing less will be subject to a 0.4 percent tax. Chongqing introduced a progressive tax ranging from 0.5 percent for homes that are double the market average price and rising to a maximum of 1.2 percent depending on the value of the home. The finance ministry said that if conditions were right, the property tax would be expanded to the rest of the country. Klibaner said the central government would study the two versions and roll out the most effective one nationwide. The pilot taxes are an initial step in long-term market reforms that will eventually include value assessment procedures and building a unified land and property registry, he said. Property prices in China's major cities posted their fourth straight month-on-month rise in December and sales picked up pace, according to the latest government figures. Prices in 70 major cities were up 0.3 percent last month from November and 6.4 percent higher than a year ago. The annualised surge peaked in April, when prices soared 12.8 percent, but growth has since slowed. Prices have remained stubbornly high, despite a range of government measures such as hiking minimum down-payments on property transactions to at least 30 percent in a bid to avoid a damaging price bubble. In Shanghai, the stock market reaction was mixed with some developers' shares rising because the tax rates were lower than many expected, dealers said. The Shanghai index closed 0.13 percent higher on Friday. This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php |
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