The Standing Committee of the National People’s Congress, China’s top legislative body, adopted a decision on Saturday to authorize the State Council to launch a pilot property reform in some regions.
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According to Xinhua, the reform aims to advance property tax legislation and reform prudently, guide the rational housing consumption and economical and intensive use of land resources, and facilitate the steady and healthy development of the country’s property market.
The State Council, the nation’s highest governing body, will decide where and how the tax will be administered and other details, the report said.
The tax will apply to both residential and non-residential properties, as well as land and property owners, but will not apply to legally owned rural homes and residences that are attached.
China has long considered imposing such a tax nationwide to control the property bubble and curb excessive property speculation in the country.
According to Reuters, home prices have increased by more than 2000% since the privatization of the real estate market was introduced in the 1990s.
The proposal comes at a very sensitive time, as China’s real estate market is already under enormous strain following the financial problems of one of the nation’s largest construction developers, China Evergrande Group.
Bloomberg reported this week that residential sales plummeted 17 percent in September and home prices fell for the first time in six years.
Featured image: Matteo Damiani