The Research On Improving The System Of China’s Real Estate Tax

China’s current real estate tax laws and regulations follows the Provisional Regulations of the real estate tax of the People’s Republic of China, which was issued by the State Council in1986.China’s real estate market was in recession during that period, the country has developed a series of policies to encourage individuals to purchase houses to promote the development of the real estate market. The Provisional Regulations of the real estate tax of the People’s Republic of China set the scope of the collection of property taxes, the tax basis, tax rates to adapt to China’s encouraging policy. Since the reform and opening up, China’s economy has developed, the real estate market has gradually prospered. Since2010, trading volume has increased in the real estate market, house price has risen, and investing in the real estate market has become one of the most popular means of hoarding wealth. Speculation in the real estate market has resulted in a series of adverse effects:Firstly, the social wealth is concentrated in real estate; the available funds for the re-creation are reduced. Secondly, the wealth of a certain accumulation accumulates more wealth by investing in the real estate market, while ordinary income class can’t afford to set their own real estate. Thus, the gap between the rich and the poor is widened; what’s more, the real estate market exuberance can form foam, which may pose a threat to the country’s economy. The scope of the collection of property taxes and the tax basis of "Provisional Regulations" are no longer adapted to the current conditions. Property taxes accounted for less than4%of the national local fiscal revenue in2003-2010, which shows that the property tax is the weak capacity of local governments to raise revenue. Property taxes levy on estate. In China’s tax system, the property tax stands in a relatively weak position, accounting not much for the proportion of China’s total tax revenue. There are two reasons to reform and improve the property tax system:on one hand, it’s self-improvement of the real estate tax system; on the other hand, it also helps improve our property tax system, to enhance its position in our tax system. It’s not only the requirements of the regulation of the real estate market, but also the requirements of increasing revenue and improving our tax system requirements to reform and improve our property tax system.Through the analysis of the history and current status of China’s real estate tax system, This thesis pointed out the following problems of China’s property tax system:this sort of tax only levy on the real estate tax which is used for business, does not levy on the houses used for living, rural real estate is also out of its reach; the tax base is too narrow. There are two tax bases:property depreciated value of a house and the rent of a house, they are quite different, and the tax burden is unfair. Depreciated value can’t reflect the market value of the estate; it’s also not conducive for local governments to raise revenue. The rate1.2%applies to property depreciated value,12%apply to the rent. All provinces of China follows the provision, not taking the different situation of each province into consideration, the tax rate is not set flexibly.In response to the problems of our current property tax system, on one hand, the thesis introduces individual housing property tax reform policy in Shanghai and Chongqing, and compares the two different policies, gathers experience; on the other hand, this article describes the current property tax system in the United States and the United Kingdom, and compares the real estate tax system between the two countries to improve our property tax system. The China’s personal housing property tax reform accumulates a lot of experience for further reform of the personal the housing estate tax, such as "the duty-free area of60square meters per capita" in Shanghai and "adapting different tax rates to different property "in Chongqing. The basis of the property tax system in Britain and the United States is based on the assessed value of the property. There are two advantages to use the tax basis to assess the value:on one hand, it reflects the property’s market value and the ability of taxpayers to bear the tax burden; On the other hand, compared to the depreciated value, the value of the real estate assessed by the assessment institution will gather more revenue for local governments.The local governments of Britain and the United States have got the rights to decide the basis of tax assessment and rate of the real estate tax. According to the local budget revenues and expenditures, combining with the estimated value of real estate, the tax rate is determined and set flexibly.Based on the conclusion of the pilot and learn from the British and American real estate tax system, in the last part of the thesis, the author provides four pieces of advice to improve China’s real estate tax system:the non-operating real estate will be levied on to expand the scope of the real estate tax system. To perfect the tax basis, the assessment agencies should use mass appraisal method as the main means, supplemented by means of a single case assessment method to determine the value of real estate assessment and revaluate during a period. The tax rate should be set flexible. The rates range may set by the central government, the local government choose the tax rate; the tax rate can also be set due to the price of the estate. These two methods are based on the local government being given certain authority. The reduction of the real estate tax should be set reasonably. On the basis of referring to the tax relief of the current property tax system, combined with China’s current economy and national macro-economic policies, the development of tax relief can be set properly.