Theoretical And Empirical Research On The Design Of The Property Tax Rate

In recent years, real estate industry of accelerating development in China has become a mainstay of the economy. However, there are still a few problems behind its prosperity, such as an improper distribution of the land, an inadequate structure of real estate market, a high house price beyond common inhabitants' ability and depending on loan too much causing great financial risks. Consequently, not only will these problems impose adverse effects on China's economy, but undermine social harmony; especially Sub-prime crisis from United States reveals the necessarily of rectifying real estate market in China.Taxation policies always make significant parts of macroeconomic policies, but in China the taxation policies on real estate keep still from 80s of last century, which fail to adapt the current situation of real estate and fall behind the pace of social advance. Furthermore, laggard taxation policies on real estate lead confusion between tax and fee and some other problems, which seriously disturb the healthy development of the industry. Therefore, on Oct.2003, CCP decides to implement innovation on city-town construction tax and fee, levy property tax on real estate and cancel the correlative fee when its condition is sufficient.After discussion for years, the reform of property tax on real estate is imperative under the situation. And researches on the tax are changing from theory to practice, and this paper is also under these backgrounds. As a critical factor in taxation system, designing a proper tax rate will facilitate the success of tax reform. This paper adopts the mainstream ideas on property tax on real estate, especially studies on tax rate designing in detail, tries to put forward one method towards the question and stresses proper tax rate designing of houses for residents at length. At last, I sincerely hope that some of the thoughts and methods would be helpful to the reform.