Think tank suggests property tax for homes

BEIJING - A leading Chinese think tank has suggested that China should levy property tax on homes featuring more than 40 square meters per person.

China should expand its pilot property tax reforms beyond Shanghai and Chongqing and levy differentiated property tax on homes, said a report titled "Housing Security in the New Urbanization Background." It was issued on Wednesday by the Chinese Academy of Social Sciences.

It is reasonable to draw on administrative measures to manage the property market at certain stages, but in the long run, economic and market measures should be applied to rationalize citizens' living space, the report said.

The major conflict for the Chinese property market is structural, with the biggest problems being that home prices are unaffordable and there are not enough low-priced, government-subsidized homes, said the report.

The Chinese government has repeatedly reiterated its stance on property market control and vowed to keep in place tightening measures like bans on third-home purchases, higher down payment requirements and property tax trials.

However, there have been concerns over the cooling property sector's impact on the broader economy, as property investment accounts for about 13 percent of China's gross domestic output and one-fifth of the country's fixed-asset investment.

Housing sales rose 5.6 percent year-on-year to 4.63 trillion yuan ($735 billion) in the first 10 months of the year, accelerating by 2.9 percentage points from the January-September period, according to the National Bureau of Statistics.