Shenzhen moving ahead with new home tax
2013-March-27 Source: Szdaily web edition
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Shenzhen will release a detailed plan this week for local implementation of the new national tax law that levies a 20-percent tax on profits from sales of pre-owned homes.

Additionally, the Guangdong Province Government used a regulation released Monday to toughen restrictions on home prices and ask that four cities — Guangzhou, Shenzhen, Zhuhai and Foshan —strictly follow national home-purchase limitations intended to rein in skyrocketing home prices.

The cities of Shenzhen and Guangzhou, where home prices are especially increasing, are required to release plans for annual objectives to curb prices of newly built homes this week.

Zhou Qingliang, market research director of Zhonglian Real Estate, said Shenzhen's housing market likely will be greatly affected by the upcoming policy. The provincial regulation didn't elaborate on how the tax will be implemented.

Wang Feng, director of Shenzhen Real Estate Research Center, said Shenzhen has been following the State home purchase restrictions since 2010. Wang said more work needs to be done to determine how the home income tax can be implemented locally because a multitude of factors are involved, such as a building's age and a home's renovation costs.

Officials in Zhuhai said detailed policies in that city were not yet completed. In Foshan, where a 20-percent home income tax has been in place for six years, property developers and homebuyers were unperturbed.

Zhou Feng, a research manager with My Top Home, said the 20-percent tax was not likely to be fully adopted in Guangzhou.

"The policy may be more flexibly implemented if more taxes are imposed," Zhou said.

Housing officials said the regulation also will increase supplies of small and medium-sized homes and promote efforts to build more affordable homes. The regulation targets completion of 116,000 affordable homes this year and construction starts on another 78,400 affordable homes by October.

JP Morgan Chase China CEO Gong Fangxiong said at a recent economic forum in Shenzhen that a thorough cure for the housing market lies in increasing supplies rather than imposing a heavy tax on home sale income.

Editor: Jecey
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