China has decided to delay the expansion of its property tax reform for this year, Xinhua News Agency reported on Wednesday.
"Considering all aspects of the situation, there are no suitable conditions to pilot the property tax reform in more cities this year," China's Finance Ministry was quoted as saying, adding the decision was made after preliminary research was conducted in a few cities.
The report is also posted on the official website of the Ministry of Finance.
For more than a decade, China has been considering imposing a nationwide property tax to stabilize the real estate sector. Since 2011, Shanghai and Chongqing have started levying property taxes on individual residential properties on a trial basis.
In October last year, the Standing Committee of the National People's Congress, China's top legislature, made a momentous decision to authorize the State Council to pilot property tax reforms in certain regions. The move, which aimed to advance the legislation and reform of property tax, has enabled relative departments to draft measures and make preparations for the work.
However, "property tax" was not mentioned in this year's government work report, which serves as a yearly guideline for the country's development.
After the Chinese government started a deleveraging campaign in 2020 to control borrowing among highly indebted developers, the real estate sector has suffered from liquidity tension, weighed by weak demand after the pandemic outbreak.
According to the government work report delivered by Premier Li Keqiang earlier this month, the government vowed to implement city-specific policies to help the healthy development of the property sector.
Li again reiterated that "housing is for living, not for speculation," suggesting there is no plan for a large-scale easing or stimulus for the property sector.
On Wednesday, China's Financial Stability and Development Committee said the government would research and take forceful and effective measures to prevent and resolve risks in the property sector, and also propose measures for development model transformation.
Source: Xinhua
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