(This article was published in China Economic Weekly, No.8, 2017)
How hot is the topic of real estate tax? It is no exaggeration to describe "seeing the wind is rain". As long as anything happens to the real estate tax, it will become the focus of public opinion.
What triggered this round of hot discussion on real estate tax was the Guiding Opinions on Innovating the Government’s Allocation of Resources issued by the State Council years ago. This long article has more than 7,000 words, but only a slight mention of real estate tax has been repeatedly ground by public opinion.
In fact, the original words of the opinion draft are "under the premise of maintaining the unified national market, support all regions to explore and innovate in new urbanization, state-owned assets and state-owned enterprise reform, regional financial markets and financial institutions, real estate tax, old-age care and medical security". In just a few decades, referring to many exploration and innovation projects, public opinion only magnified the concept of "real estate tax" and even concluded that "the real estate tax really came in 2017".
But this judgment seems to be too optimistic. Then, from 2013, it was proposed to "speed up the legislation of real estate tax and promote the reform in a timely manner". Three years later, why has the real estate tax that has entered the legislative process been delayed?
Real estate tax law is still difficult to introduce in 2017.
A recent article published in the media, "Attention! "Real estate tax" is coming soon! Will house prices finally fall in 2017? The report of "is in the heat." The report quoted Liu Jianwen, a professor at Peking University Law School and president of China Finance and Taxation Law Research Association, as saying that the term of this session of the National People’s Congress will end in 2017. Therefore, it is expected that the real estate tax law will be passed before the end of 2017 at the earliest, or it may be submitted for deliberation at the end of 2017 and passed during the next session of the National People’s Congress.
It is the above passage that makes many people misunderstand that real estate tax will be levied and fully implemented in 2017. This made Liu Jianwen very helpless: "In fact, this view was said after the Third Plenary Session of the 18 th CPC Central Committee in 2013. Later, it was corrected on many occasions, but it was not really corrected."
He clarified by China Economic Weekly: "First of all, the term of this session of the National People’s Congress is not until the end of 2017, but until March 2018. Secondly, the draft real estate tax law has been completed and may be submitted to the National People’s Congress Standing Committee (NPCSC) for deliberation as soon as 2017. However, even if it is submitted to the National People’s Congress Standing Committee (NPCSC) for deliberation, it does not mean that it can be implemented. From the legislative process, it is very difficult and impossible for the real estate tax law to be introduced in 2017. "
As the real estate tax involves not only the interests of thousands of households, but also the interests of the central and local governments, as well as the stability of the whole society and the protection of private property, it is reasonable for such an important law to be promulgated cautiously.
The reason why the real estate tax has been delayed for a long time, Liu Jianwen thinks: "When should this real estate tax law be introduced, what kind of problems should be solved, what is the purpose and what is the purpose? These are all very important. Legislation has legal procedures and it takes time to introduce it."
Liu Jianwen predicted: "According to the deployment of the central authorities, it should be implemented before 2020. There are still four years. "
The draft real estate tax law has been basically completed.
In China’s current tax system, there is no real estate tax, and the taxes related to real estate include property tax and land use tax.
The property tax was levied in 1986, which is only applicable to the operating real estate of units and individuals, and is tax-free for individual housing, so it has basically no impact on people’s lives.
The predecessor of real estate tax is property tax. In 2003, China began to propose the property tax reform, which is actually how to tax individual houses under the public ownership of land. Concurrent with the reform of property tax is the reform of real estate tax and fee.
Zhang Bin, director of the Tax Research Office of national academy of economic strategy, gave the answer: "Under the current tax system in China, in the process of real estate development, construction and transaction, the front-end tax burden is heavier; However, the tax burden on the retention link is relatively light. Except in the pilot areas of Chongqing and Shanghai, property tax and urban land use tax are not levied on the retention link of self-occupied houses. Therefore, the comprehensive reform of real estate taxes and fees is emphasized in the fiscal and taxation reform, which is conducive to the balance of tax burden. "
As the property tax is levied according to the rent or the original value of the house, in recent years, State Taxation Administration of The People’s Republic of China has been promoting the merger of property tax and land use tax. After the merger, it is not levied according to the original value, but according to the assessed value. This is actually paving the way for promoting real estate tax.
Compared with property tax, real estate tax is a comprehensive concept. It is a matter of recent years that China formally proposed to levy real estate tax on residential buildings.
In November, 2013, the Third Plenary Session of the 18th CPC Central Committee adopted the Decision of the Central Committee of the Communist Party of China on Several Major Issues of Comprehensively Deepening Reform, which proposed "speeding up the legislation of real estate tax and promoting the reform in a timely manner", thus setting the principle of "statutory taxation" in which real estate tax should be legislated first and then reformed, that is, "the government cannot levy taxes without corresponding laws".
After that, the legislative work of real estate tax began. However, the legislation of real estate tax this time is very different from the previous departmental legislation. The drafting of the real estate tax law was led by the Budget Working Committee of the National People’s Congress, with the participation of the Ministry of Finance, State Taxation Administration of The People’s Republic of China and other functional departments. At the same time, it also absorbed some experts and organized a team to jointly draft it.
What is widely concerned is whether the existing property tax and urban land use tax will be merged in the real estate tax law.
Ni Hongri, a researcher at the State Council Development Research Center, said earlier that it is certain that the real estate tax reform will combine the existing property tax with the urban land use tax. This means that the property tax will increase the tax burden of real estate ownership, and it is based on the assessed value of real estate, and other things such as land value-added tax and deed tax will not be included for the time being.
Whether the draft really "combines the existing property tax with the urban land use tax" as Ni Hongri said is still unknown. However, the reporter of China Economic Weekly learned that at present, the draft real estate tax law has been basically completed.
"The draft has been drafted for a year or two. After the drafting is completed, it will be submitted to the National People’s Congress Standing Committee (NPCSC) for deliberation. Now that the preliminary draft is available, as for when it will be introduced, it depends on the high-level judgment on the status quo of the entire economic development and the consensus of taxpayers. " Liu Jianwen said.
The direction of real estate tax reform in China has been clear: major reforms should be based on laws. However, there are still great disputes about the collection of real estate tax: one is the purpose of collection, and the other is how to collect it. These still need time to clarify.
Exemption involves people’s right of residence.
Zhang Bin told the reporter of China Economic Weekly that there are four main goals involved in the discussion of real estate tax: First, cracking down on real estate speculation and curbing housing prices; The second is to adjust the distribution of wealth; Third, as the main tax category of grass-roots government, improve the local tax system; The fourth is to promote the effective use of land resources.
People are more concerned about lowering house prices. In fact, the real estate tax pilot schemes in Shanghai and Chongqing are all based on curbing housing prices and cracking down on real estate speculation.
Under the goal of curbing housing prices and cracking down on real estate speculation, in Zhang Bin’s view, there are two ideas for real estate tax collection: one is the Shanghai model, which taxes the part of new real estate that exceeds a certain area and does not involve the stock; One is the Chongqing model, which involves the stock, but only involves a few high-grade houses.
If the goal of real estate tax collection is to curb the excessive rise of housing prices and adjust the distribution of wealth, we should focus on the adjustment function, set a higher exemption amount, and exempt basic housing consumption and improved housing consumption. This is what people are most concerned about. After all, once the real estate tax is implemented, whether or not to pay money every year after buying a house, and how much money to pay, the money needs to be taken out of the pockets of ordinary people.
In 2011, both Shanghai and Chongqing’s property tax pilot schemes have exemption clauses: Shanghai’s local household registration residents are exempted from 60 square meters per capita, and Chongqing’s new purchase of 100 square meters is exempted. In addition, there is also a hot discussion about the exemption of 30 square meters or 50 square meters per capita.
Liu Jianwen told the reporter of China Economic Weekly: "Now public opinion has repeatedly stressed that not all private properties should be taxed, because it involves the protection of taxpayers’ basic right of residence and survival. Therefore, there needs to be a reasonable deduction in the process of taxation, that is, how many areas can be exempted from taxation. I am very supportive of giving necessary deductions in the process of taxation. According to the actual situation in China, I think that the deduction of 30 square meters and 50 square meters per capita can be considered. "
It is difficult to collect universally.
If it is exempted, it means that most people’s self-occupied houses or even two sets of self-occupied and improved houses may be within the scope of tax exemption.
However, with China’s full-scale reform of camp reform on May 1st last year, real estate tax has been entrusted with the important task of shouldering the banner of local fiscal expenditure gap.
For a long time, business tax is the main source of local tax revenue, and it has the characteristics of stability and controllability. After the reform of the camp, the "business tax" originally belonging to the local tax was suddenly changed to the "value-added tax" of the national tax, and the local tax revenue fell sharply. At present, after the reform of the camp, the central and local governments share the value-added tax 5: 5, but after the transition period, how to establish and improve the local tax system is still a very important issue.
Coupled with heavy local debts and unsustainable land finance, it is inevitable that real estate tax will be given another important role in many cases.
Xu Shanda, former deputy director of State Taxation Administration of The People’s Republic of China, said that three goals were put forward when the real estate tax reform was piloted. The first goal is to increase local government revenue. But now it seems that the scale of property tax revenue in Shanghai and Chongqing is extremely small. The second goal is to narrow the income gap among residents. The third goal is to stabilize housing prices. Real estate tax reform in Shanghai and Chongqing has achieved some results, but it is still unrealistic to expect it to achieve all the reform goals.
Zhang Bin’s expression is even more direct: the real estate tax of exemption mode will definitely not become the main tax of local governments, because the scope of collection is limited and the income is limited. In this case, the real estate tax can not replace other sources of income of local governments, nor can it fill the local financial gap after the reform of the camp.
In Zhang Bin’s view, the American-style real estate tax is generally levied, and the money collected is mainly used to meet the funding needs of local public services. If the purpose of introducing real estate tax in China is the same as that in the United States, then the amount of money paid by ordinary people should be large enough to enjoy the services directly linked to local governments.
"All in all, the first idea of introducing real estate tax to curb housing prices is easier to introduce because of its small coverage, less social debate and less difficulty in launching; However, as the second way to make up for the local financial gap, we should be cautious if it is introduced. Because of the universal collection, thousands of households have to pay taxes, and it is hard to say whether it can be completely collected. " Zhang Bin said.
