January 31, 2013
Translated by Zhu Na

A controversial plan to expand a property tax that is already being levied in Shanghai and Chongqing to the capital has been submitted to the State Council for approval, according to what an anonymous source told the China Times (華夏時報).

"The Beijing property tax pilot scheme has been submitted to the relevant departments of the State Council and is now awaiting approval," a source close to the Beijing Finance and Taxation Department who was unwilling to reveal their name told the newspaper.

The Beijing Tax Administration and the Beijing Finance Bureau have this morning both refuted the claims made in the article.

In statements posted to their official Weibo accounts, the two government agencies say that no officials from their office were interviewed by a journalist from China Times and that neither office has received any official notice regarding the introduction of a property tax.

Anonymous Source Says Tax Could be Introduced in First Half of 2013

"If it's approved, it will be implemented in the first half of this year at the earliest."

According to China Times' unnamed source, this scheme proposes that property with a per capita living space equal to or less than 24 square meters will be exempt from the tax.

In Shanghai the threshold for tax exemption is currently 60 square meters per capita.

"In comparison, Beijing's scheme is much stricter," the source said.

The China Times report said that Beijing has been prepared to promote this property tax pilot for a while. The direction of expanding property tax reform is now certain.

"The conditions for Beijing to implement the trial have been set for a long time," the source said.

However, there is worry that Beijing's low exemption threshold is too strict and is likely to encounter resistance from all sides.

More than 60 percent of those surveyed by Xinhua News Agency are opposed to the new tax, and only a small minority hold a favorable opinion of it.

The source also told China Times that, in addition to reports about the imminent introduction of a housing database, news that a property tax would be introduced in Beijing might have been a motivating factor behind a recently reported dumping of properties by officials.

"The property tax pilot scheme submitted in Beijing suggests covering all housing in the city, and the tax exemption standard of 24 square meters per capita is much stricter than the standards in Chongqing and Shanghai," the source said.

China Times' source didn't reveal the specific tax range, but did say that it will be higher in Beijing than in Chongqing and Shanghai.

The source also said that Beijing's property tax would be more onerous in order to better control speculation and investment in the real estate market.

Links and Sources
China Times: 消息稱北京房產(chǎn)稅試點方案已上報 起征面積人均24平米
Sina Weibo: Beijing Tax Administration Post
Sina Weibo: Beijing Finance Bureau Post