http://www.businessweek.com/news/2010-0 ... ate1-.htmlMay 13 (Bloomberg) -- Shanghai’s municipal government may levy an annual tax of about 1.5 percent of the value of properties, the Hunan province-based Xiaoxiang Morning Herald newspaper reported today on its website, citing a developer who declined to be identified. The government will make the announcement on May 15, the newspaper said. Several Shanghai-based developers have received “hints” that new policies are poised to be issued to cap prices, and have begun to sell their properties, it said. The Oriental Morning Post said the tax will be around 0.8 percent.
“Shanghai house prices would fall sharply if it was introduced, but I think 0.8 percent is more likely because the government doesn’t want home prices to fall that much,” said Zhang Chifei, a Nanjing-based analyst at Huatai Securities Co. The Shanghai Municipal Housing Support and Building Administration Bureau didn’t answer phone calls seeking comment.
Shanghai would be the first city in China to impose its own property tax to combat speculation in the housing market and control price increases. Real estate prices in 70 Chinese cities rose by a record 12.8 percent in April from a year earlier, the National Bureau of Statistics said on May 11.
Shanghai’s property policy will be more severe than that in Beijing, the Xiaoxiang report said, citing an unnamed developer. Beijing became the first Chinese city to limit residents to purchasing one new home starting this month.
Potential Slump
China has restricted pre-sales by developers, curbed loans for third-home purchases and on May 2 raised banks’ minimum reserve requirements for the third time this year. The government is trying to peel back the effects of a stimulus plan and $1.4 trillion lending binge that revived economic growth while raising the risk of asset bubbles.
The Shanghai government is unlikely to impose an aggressive property tax, said Zuo Hongying, a Shanghai-based analyst at AJ Securities Co. “They may introduce different tax benchmarks for different groups of people,” he said.
Property prices in Shanghai may fall as much as 40 percent if the new tax is imposed, and declines in other cities would follow, Wu Jianxiong, a Shanghai-based analyst at Central China Securities Holdings, said yesterday.
The levy may only be charged on new purchases instead of existing apartments, the Oriental Morning Post reported, citing unidentified sources.
‘Cautious Style’
Shanghai’s housing bureau will meet tomorrow to discuss detailed regulations aimed at curbing speculation in residential property, and new rules may be released within two weeks, China Daily said today, citing Sun Lijian, an adviser to the city’s government.
The government is unlikely to impose a property tax now given its “cautious” style, and such a levy is more likely to be imposed in two or three years’ time, Sun was cited by the English-language daily as saying.
Shanghai’s policies are unlikely to deviate much from regulations announced by the central government over the last month, Sun said.
Beijing will limit new apartment purchases to one per family as part of measures aimed at slowing the rise in housing prices, the Xinhua News Agency reported on April 30.
Sales in Beijing measured by floor area dropped 41 percent in April from a year earlier, the statistics bureau said on its website yesterday. The price of new residential properties rose 21.5 percent from a year earlier and the price of second-hand housing rose 8.4 percent, according to the statement.
China Vanke Co., the nation’s biggest developer by market value, rose 0.4 percent at the 3 p.m. close on the smaller Shenzhen exchange. Poly Real Estate Group Co., the second biggest, added 0.5 percent in Shanghai.
The benchmark Shanghai Composite Index rose 2.1 percent.
: Property Tax in Shanghai very soon:
- that's i called as a "Doom Day".
