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Institute for Workplace Studies-----------------Professor Samuel B. Bacharach

School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies

Cornell University

16 East 34th Street, 4th floor--------------------Stuart Basefsky

New York, NY 10016 -------------------------------Director, IWS News Bureau

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Asian Development Bank (ADB)

 

PROPERTY TAXATION IN THE PEOPLE'S REPUBLIC OF CHINA [9 May 2014]

http://www.adb.org/publications/property-taxation-peoples-republic-china

or

http://www.adb.org/sites/default/files/pub/2014/property-taxation-peoples-republic-china.pdf

[full-text, 16 pages]

 

Description

 

The property taxation system in the People’s Republic of China (PRC) is still developing and does not include important features that would make it efficient. For instance, residential property is excluded from the tax base. This has contributed to real estate speculation, income disparity, and revenue losses.

 

A well-functioning local property tax system in the PRC would provide an efficient, equitable and sustainable way to finance local development and government spending. By helping to align expenditure responsibilities with revenue allocations at the local level, property taxation could reduce inequality in the provision of public goods and foster local government ability to provide them. Further, it will reduce the incentive for speculative behavior mitigating housing bubbles.

 

To further develop property taxation in the PRC it is recommended to gradually strengthen and expand the existing pilots, supported by clear principles on the delegation of taxation responsibilities, the definition of a nationally standardized tax base, an affordable tax rate, and enhanced local government capacity.

 

This policy note aims at drawing policy recommendations for future developments in property taxation in the People’s Republic of China (PRC) by reviewing best international practices and specific challenges in the PRC.

 

Contents

 

Abstract

Introduction

Lessons from International Experience

Property Taxation in the PRC

Policy Recommendations

 

 

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