A Study On The Appropriate Time Of Property Tax Levy In China

The Third Plenum of the 16th National Party Congress put forward "The decision about perfecting the socialist market economic system", which clearly points out: "The practice of urban construction tax reform, when conditions are ripe for the introduction of a standardized real estate property tax, the corresponding abolition of the fees." After the announcement of the decision, property tax has been paid much attention by researchers and many ordinary people. After all, the healthy development of the real estate industry has important impacts on every ordinary person and building a harmonious society in China. Therefore, relative real estate-related tax reform has become an important part of tax reform in China.Throughout the world, China is one of a few countries where governments do not levy property tax. At present, people have reached a consensus on property tax levy, but it is a controversial topic on the time of it. On the basis of reference to other countries with experience of property tax levy, China will carry on property tax according to its national conditions. However, property tax is a kind of complicated tax and the property tax levy will have a great effect on China's society and economy. Consequently, if we choose the inappropriate time to impose property tax, it will inevitably have many adverse impacts.The thesis about the time of property tax collection in China is composed of four chapters. The first chapter states the definition of property tax and the significance of its levy. The second chapter analyzes and discusses China's inappropriate time of imposing property tax. The third chapter demonstrates appropriate time of property tax collection. The fourth chapter offers some preliminary d(?)sign for China's property tax. The first chapter illustrates the definition of property tax and the significance of its levy. Based on the two concepts of property and real estate, the author describes the property tax as realty tax like capital levy, real estate tax and the like. At present, the basic framework of China's property tax reform is to transfer existing building tax, urban real estate tax, land value-added tax and land transfer fees into a unified property tax collection in the stage of real estate tenure; to shift the collection of taxes and fees during house construction to the levy of taxes and fees in house tenure. The basic principle is to foresee scientifically and totally the existing building tax and the charges of real estate development and construction, which makes the overall size of property tax equal to them.According to the connotation of property tax, the outcome of property tax plays a crucial role not only in the regulation of the real estate industry reform but also in the realization of the entire social equity, the improvement of economic efficiency and the building of a harmonious society. The significance of property taxes are stated as follows:Firstly, adjust the possession of the rich and the poor in the interests of resources, and maintain social justice. Secondly, levy property taxes to inhibit excessive enjoyment of luxury housing and consumption, and to encourage an appropriate and rational consumption, which promotes energy-saving type of residential and public building development, effectively pushes forward the mobile market of the existing housing resources, Optimizes the allocation of urban land resources structure and improves the use efficiency of urban housing stock resources. Thirdly, with the establishment and improvement of the property tax for physical assets holders, government can reversely modulate economy through the means of fiscal measures like property tax, interest tax and the like, and monetary means like Interest rates and so on, which results in implementation of the operation of an effective macroeconomic regulation. Fourthly, it will provide the local governments with stable sources of revenue to overcome their short-term behavior. Last but not least, the ultimate aim of the state's proposed property tax levy is to find a solution to the problems in economic development and to balance social resources. On the basis of the analysis above, we should impose property taxes because of its significances. However, in terms of our national conditions, we can't blindly collect the property taxes on account of the appropriate time.Chapter two analyzes the reasons for the premature time of property tax levy in China. In the first place, whether the land transfer funds should be incorporated into the property tax problem has not been undetermined. With the implementation of property tax collection, we should properly deal with the relationship between property taxes and land transfer funds. That is to say, there is a controversial topic on how we collect the part of the land transfer funds after the implementation of property tax levy. Whether the land transfer funds should be incorporated into a year-on-year property tax levy or not are under discussion. In second place, there are unclear property rights and the lack of real estate value assessment system. What's more, there is no clear definition of tax policy between the new houses and old ones. In addition, the property taxes and the overall real estate tax reform should be in synchronization, but it is hard to balance the interests of all sides. Finally, the necessary laws and regulations related to the property taxes have not been established. Therefore, there is no property tax collection without the solutions of the problems discussed above.The third chapter offers China's appropriate time of property tax levy on the basis of reference to other countries with experience of property tax levy. The implementation of the property tax levy is a project unlike some transfer taxes with simple principles and operations like value-added tax and sales taxes. It requires a series of laws and regulations. The work has to be done before the official implementation of the property tax collection is stated in details as follows:Firstly, make clear the land transfer funds and bring them into the property tax levy with procedures, and make a good preparation. The general direction of the future reform of land transfer funds and property taxes is to merge both of them, which is the only way to fundamentally solve the land use and tenure stage of the problem. Gradually reduce the amount of land transfer funds and conduct the combination of a one-time transfer of land with an annual rent.Secondly, unify the integration of tax system and the completion of relevant tax reform. From the existing tax system, there are six kinds of taxes collecting real estate levy including land value, urban land-use tax, arable land tax, building tax, city real estate tax and deed tax. This thesis offers some suggestions to all levels governments on checking up real estate-related charges, which reserves land value, arable land tax, and deed tax and abolishes building tax, city real estate tax and urban land-use tax.Thirdly, establish and improve the real estate and property assessment system. The establishment and improvement of the assessment system is an important condition for the implementation of the property tax collection. The paper also proposes to establish a sound real estate registration system, to build up a scientific integrity and practical assessment system, and to set up an assess dispute mechanism, which results in a construction of China's property tax assessment system.Fourthly, make sure the policy between the new property and the old property and the detailed solutions. As purchased real estate has had one-time payment for a number of relevant taxes before the implementation of the property tax collection, it will inevitably lead to the duplication of the original building taxes if all the real estates are under the new laws. Consequently, there must be a difference between the new and the old building taxes. Newly purchased houses have a unified policy on property tax and old ones hold a tax-free policy. In my opinion, with the implementation of the new policy on the new buildings and the old policy on the old ones, there is a little possible to result in the expensive price of both new and old houses.Last but not least, expeditiously formulate the necessary laws and regulations of property tax collection and make greater efforts to publicize. Throughout the world, all the countries and areas in which has an effective management of their real estate market attach great attention to the establishment of the regulations and laws of the real estate and try their best to set up a system of laws, orders and rules to regulate all the managements. The author offers suggestions on the implementations of an inheritance tax and gift tax and on how to deal with the relations between the property tax levy and other related taxes. Through relevant media, such as television, radio, newspapers, magazines, we can give publicity and explanation to the significance of the annual rent and property tax and their specific methods, which let taxpayers truly understand the origin and development of the property tax levy.From the analysis above, there are sufficient conditions for the implementation of property tax collection. In addition to the conditions discussed above, the rational design of property tax is also a condition. To meet all the conditions analyzed, it is the best time for the implementation of property tax levy.The fourth chapter offers some preliminary design for China's property tax combining the tax system of property tax of other countries with our national conditions.